slowing in the pace of the recovery i want to stress, it's too early to say both how large that is and how sustained it will be we just don't know yet because we have to wait to see the actual data on spending and employment come in this is what we're seeing. of course, we're monitoring it very carefully i would be remiss in not stressing this enough the path of the economy is going to depend to an extent on the virus, the measures we take to keep it in check that is a very fundamental fact about our economy right now. the two things are not in conflict social distancing measures and fast reopening of the economy actually go together they are not in competition with each other >> thank you >> hi. just to follow up on that, and

thanks for taking my question, you added a sentence into the statement about the course of the economy depends on the path of the virus is this -- do you feel this idea or view is not widely enough understood do you feel -- you had warned back in may that too early reopening or cautious reopening might harm the economy do you feel that message is not heard and some of these reopenings took place perhaps sooner than they should have >> i think we feel that it might be the most central fact or the most central driver of the economy is the virus we're seeing that again. you saw that during the lockdown when we got cases way down you saw the economy reopening. you saw spending go up and hiring go up now that the cases have spiked again. again, the early data,

high-frequency data suggests that there's a slower pace of growth at least for now. we don't know how deep or how long that will be. it's such an important sentence, we just decided that it needed to be in our post meeting statement. it's so fundamental. you know, i think we can't say it enough. it's really important. think of it as three stages. there's the lockdown we know what that looks like we'll get the data i guess later this week on gdp being down very historically large amounts then there was the reopening we would expect that many, many people would go back to work those whose jobs could be done without exposure to lots of people in tight groups, they should be able to go back to work during that phase fairly quickly. but that would depend on being able to keep the virus under control, which will depend on wearing masks and other social distancing measures. that's where we are. it's such an important factor. we're all talking about it, so

it really had to be in the statement. >> thank you mike mckee. >> mr. chairman, i'm wondering what it is, you talk a lot about using all your tools governor brainard talked about moving to accommodation. what it is you could actually do you've lowered rates to 0, set up lending programs, hasn't been much take up the tools you talk about are generally in service of keeping interest rates low where they already are. unless you were to go to negative interest rates, i'm wondering what additional accommodation the fed can bring, or is it really up to the fiscal authorities at this point to rescue the economy to add additional help for it. >> right you're right we are committed to using our full range of tools to support the u.s. economy at this difficult time, and we will also remain committed in that sense

we feel like we have ways to further support our economy through credit and liquidity facilities, which are effectively unlimited. we can just those programs we can adjust forward guidance, asset purchases. there are things we can do we feel like we have the ability to do more but i would not disagree with the importance of fiscal policy with your statement about the importance of fiscal policy. fiscal policy can address things we can't address, if there are particular groups that need help, direct monetary help alone but an actual grant as the ppe program showed, you can save a lot of businesses and a lot of jobs with those in a case where lending a company money might not be the right answer. the company might not want to take a loan out to pay workers

because there's no business. lending is a particular tool and we're using it very aggressively fiscal policy is essential here. congress's action early in the pandemic historically large by any standard around the world. certainly by u.s. standards it's really helping now it's really helping. it's going to stand up very well to scrutiny down the years congress is very fast and open-handed response has really helped i think as i said very likely will be needed from all of us. i see congress negotiating now over a new package and i think that's a good thing. >> okay. edward lawrence. >> thank you, mr. chairman, for taking the question. you talked about it several times, the statement says the path of the economy is linked to the path of the virus. it looks like a vaccine might

come this year either in october or towards the end of the year has the committee talked about how that might change fed policies as a follow, did you see the vaccine getting inflation back to where you want it to be thank you. >> so we -- of course the concept of vaccines comes up in our discussions, of course it does i have to say our job is not to plan for upside case the upside case, we've got that covered. our job is to plan for the full range of things that could happen we're assuming we're going to continue to assume that our facilities are needed, that our policies are needed and that the public needs the support that we're giving the public until shown otherwise. there's great uncertainty around the development of therapeutics and vaccines all of us went them to happen as soon as possible but we can't plan on that we've got to hope for the

worst -- hope for the best and plan for the worst i guess it goes. >> in terms of inflation, i don't know i think fundamentally this is a disinflationary shock. i know there's a lot of discussion about how this might lead to inflation over time but we're seeing disinflationary pressures around the world going into this. now we see a big shock to demand and core inflation dropping to 1% i do think for quite sometime we're going to be struggling against disinflationary pressures rather than against inflationary pressures >> thank you ann. >> thank you for taking my question as you monitor the rising infections and recovery, could you speak to what would be the

trigger be for doing further easing on the flip side of that, when would it be reasonable to expect the fed to consider raising rates again. >> as we said, carefully monitoring the situation we moved very quickly and very aggressively early we've been monitoring the situation. i think our policy is in a good place, but we've looked at ways of adapting our policy as time goes by and we're ready to do that when we think it's appropriate. i can't give you a specific trigger. it is when we think it would help would it help more than whether or not we're doing now to foster maximum employment and stable prices sorry, your second question was? i can't hear you

say again. >> when it would be reasonable for the fed to consider raising rates again. >> as i said earlier a while back, we're not even thinking about raising rates. we're totally focused on providing the economy the support that it will need. we think it will need highly accommodative monetary policy and the use of tools for an extended period, and we're absolutely committed to staying in this until we're very confident that that is no longer needed i wouldn't look for us to be sending signals about cutting back on facilities or anything like that for a very long time we're in this until we're well through it i think the picture is you have the lockdown and then the reopening but there's probably a long tail where a large number of people are strugglinging to

back to work because heavily affected areas of the economy are going to be challenged to employ millions of people out of work i think 14 million people are now out of work, who were working in february. that's going to take a while, i think, in everyone's reckoning everyone should 'know we're goig to be there for all that. >> thank you katherine with bloomberg. >> hi, chair, thank you for taking our questions you mentioned earlier that the playbook market we had was the best we've had in 50 years yet unemployment was double that of whites. i want to ask you, we've seen some economists and campaign call for the targeting gap of minority unemployment rates. even if you don't get a mandate on this from congress, is it

something you would consider more going forward and how would you do that? i also wanted to ask you about former economist claude yap simms rating from last night she gave an account of her time at the fed, described harassment and professional gas lighting that others have spoken to is this your fed reserve. >> while the aggregate unemployment rate was 3.5%, every economy, every market in every economy is the disparate level between blacks and white it's generally twice as high for

blacks this was the lowest black unemployment rate for 50 years, since we started keeping records, less than 50 years ago. that's a fact. it's not a good fact we have started in recent years to focus considerable time and attention on disparate levels of unemployment among different racial groups and demographic groups we regularly discuss that in fomc discussions we call them out in testimony and speeches and monetary report to congress you'll see it everywhere in all the things that we do so what does that mean i think what we learned is that a tight labor market does things for minorities and people at the lower end of the income spectrum

generally but tight labor markets it took eight years -- it took the eighth and ninth and tenth year of that expansion to get to those benefits. we need more than that that's not a good strategy waiting eight, nine, ten years getting there. we're going to get back there as fast as we can that's what we can do. society more broadly can affect these things we don't really have tools that can address distributional fiscal outcomes as well as policy and policy generally. education, health care, all those things are better at doing that in terms of -- we do -- you will see that discussed -- the black unemployment rate discussed all the time in what we do i think we clearly understand now that it's something to weigh with a tight labor market. it is very much in our thinking. again, in a world where we don't

really have the best tools to address that so something that we're doing. i have not seen that -- i did not see that blog post yet, although someone mentioned it to me we've been in meetings until just before this i will take a look at it i will do that without having had a chance to read about it and think about it and under it, i'll say a couple of things. first, i think it's fair to acknowledge that there's been a lot of pain and injustice and unfair treatment that women have experienced in the workplace, not just among economists but economists and at the fed. that's been going on far too long like every other organization the fed could have done more and should have done more. i would say, though, that we

have made it a very high priority to have diverse and inclusive organization as we can. i think we've made a lot of progress on that we want a place where it's free to speak where views are welcome. people can disagree but must do so respectfully. i think a lot of organizations are coming around to understanding the importance of that my experience has been from my career in business, too, that organizations -- the really successful organizations in our society get this they do. mostly they get it that if you want to attract the best people, you're going to attract the best people by having a diverse and inclusive workforce and workplace. so we've made diversity a priority this has been a big issue for the economics profession we had the two heads of the aea task force on this, who happened to be named ben bernanke and

janet yellen come here and i co-hosted an event with them lastiary or the year before which had several00, 500 people listening in about these issues. we're doing a lot. i'm sure we can do know. we're doing a lot to foster a respectful environment particularly for women but all people it's a very high priority for us as an organization i will look into that when this is over. >> okay. thank you. don lee. >> chair powell, on the labor market, jobless claims rose again recently and new hiring activity has weakened. how big are the risk of the unemployment rising with job growth trending negative this

summer >> so as i mentioned earlier, we're watching this high frequency data of course official labor market reports come out once a month. no one has had a good record of predicting what they say in may and june, stronger than anybody expected, particularly in may so i would say some humility is appropriate here in terms of thinking we understand exactly where this is going. i think all we can say today, there's evidence in high frequency data, the surveys and you're tracking -- you get pictures of spending, you get pictures of people's movements it looks like we're seeing a slow down in the rate of growth. it might be short-lived, it might not be it seems to be related to -- the timing of it seems to be related to the spike in cases that began in the middle of june.

now, i really don't want to get ahead of where the data are on this data over the next couple of months will answer that question recent experience suggests we need to wait and see in any case, there's clearly a risk we see a sldown in the rate of growth, economic activity and hiring it might be at a robust level. honestly we will not know until we start to see more data come in >> thank you victoria guida. >> hi, i'm with politico thanks for taking my question. i wanted to ask 13-3 facilities. you've used emergency authorities to buy assets you can't buy like corporate bonds, etfs i was just wondering, what is the scope of your authority under 13-3 what type of assets could you

buy? could you be equities, for example? >> we haven't looked at this and we have no intention done if i work or thought about buying equiti equities we're bound by the provisions of 13-3, programs, facilities, broad applicability meaning it can't just be focused on one entity it has to be a broad group of entities there's a lot in 13-3 about solvency it was rewritten or amended after financial crisis and rewritten in a way that was meant to make it challenging to bail out large financial institutions there is a lot to make sure they are going to be solvent. we have to meet those requirements we haven't looked and tried and say let's make a complete list using these facilities we could

buy corporate bonds and municipal bonds, too. >> so, sorry, just to follow up really quickly is it generally supposed to be directed at debt since you talked about borrowers sflf the statute doesn't say that but you could read it that way we haven't tried to push it to what's the theoretical limit it's supposed to replace lending. that's really what we're doing you're stepping in to provide credit at times when the market has stopped functioning. that's fundamentally what you're doing with 13-3. you've got to sort of work within that framework. >> thank you

greg. >> thank you for taking my question i'm from marketwatch one of the things that's unusual is that companies are cutting wages and salaries that's something we haven't seen much i was hoping what the fed is thinking about this. it seems to indicate inflation is more volatile in the coming months and coming years. >> i think the main thing that tells you is the labor market has a long way to go to recover. we had a good labor market it wasn't perfect. there's always issues. there's always going to be issues with the economy. the labor market has a long way to go now even with two very strong months of job creation, 7.5 million jobs between the two months, we still have 14 million people unemployed. so it's just -- it's a long way

to go. that leads to a situation where there's so many people looking for jobs we have the economy only partially reopened until the economy or as the economy fully reopens people can go back to work. so it's a tough situation. i've read reports of that. of course the reported wages went up because of the composition effect low paid workers didn't go back to work. average earnings went up clearly, clearly the pressure there will not be much upward pressure on wages and compensation if the aggregate level in a world where there's an awful lot of people looking for work the main -- it underscores again the urgency of doing everything we can to restore the labor force and to support those who are -- who want to be in the labor force but whose jobs have gone away for some period of

time as they find other work due to this natural disaster >> thank you ge jean young. >> hi, chair powell. thank you very much. i want to ask you do you see merits to tying your asset purchases to economic outcomes would you consider inflation and labor market conditions as part of those outcomes? and specifically for the labor market what would you like to see before you think about pulling back. >> that's a great discussion we've talked about that at past meetings, and i imagine we will at future meetings and haven't made any decisions yet on that so you've got a couple ways to go you can tie them to dates. you can say for a specific period of time we will keep

rates at x level or say keep them there until you achieve a certain macroeconomic goal it can either be inflation or employment goal as you pointed out. i think there's attraction in all of those depending on the situation, i think for obvious reasons. you can imagine situations where you'd really want to be targeting macroeconomic outcomes it's also the case that sometimes date-based guidance works, too i think it really is fact specific it's not something -- we haven't made decisions on that, so i wouldn't be standing here telling you we're going to go this way or that way should the time come for us to change our forward guidance >> thank you hannah. >> hi, chair powell. thanks for doing this today. i wanted to ask on the stimulus bill that senate republicans are considering. they said they are weighing

where to revive -- tier one leverage ratio for banks are you concerned doing so -- given that the fed's stress test showed that under the most severe scenarios for economic recovery that several banks approached regulatory minimum requirements >> so i think what the stress test showed, under the regular weight stress test the banks packed we quickly dropped in three other scenarios, which were, you know, very bad scenarios many of the banks passed, some didn't that was done very quickly, so we pivoted and we used a provision that says we can -- there's been a material change and we're going to ask them to resubmit their capital plans we also stopped buybacks, share

buybacks and limited dividends we're working through the details of how that will work. i think we're going to send out the stress scenarios on september 30th so i would say that process is working that way but you're making a connection to it to the collins amendment what's going on there is like many other supervisors and regulators around the world, what we found is that we have found -- our banks are strong. they are strongly capitalized with lots of liquidity, and they have really been a source of strength about this crisis so far. they have written off bad loans. they are well capitalized and strong and i think will be a source of strength in this situation. so but what we did earlier was -- what happens is the banks run up against their leverage

ratio, which is a nonrisk sensitive measure, just the amount of assets on the balance sheet. people put cash on deposit at the banks, and they reached a limit of how much they can grow or made loans companies drew down loans and gave cash we gave some leverage relief earlier by temporarily -- it's temporary relief, eliminating treasuries calculation of leverage ratio this is another additional thing to do. if congress chooses to do this, we would want it to be temporary. this would not be a change in capital standards. we haven't decided to do it but it would give us the ability to allow banks to grow their balance sheets and in doing so serve their customers better i have to tell you, if you look around the world, many, many bank regulators have given ratio

relief swiss national bank, the bang of japan, european did. canada did we did what it's doing is allowing them to grow the balance sheet in a way that serves their customers. that's really what it's doing. i would want it to be explicitly temporary if we do do it. >> okay. thank you. we'll go to brian cheung with the last question. >> brian cheung with yahoo! finance. i want to ask how the framework very view working in tandem on explicit forward guidance. is the idea you're trying to have order to that you would announce the findings of the fed review before then committing to some sort of forward guidance or even yield curve control policy? thanks. >> i do think that completion of the review would -- first of all, very high priority, looking

forward to competing it probably at the june meeting but might have been the meeting before that we were right on track and then we got distracted. we weren't expecting the pandemic, of course, nobody was. the pandemic came in i think it is important to go back and finish that i think that will inform everything we do going forward i would also tell you to a very large extent the changes we'll make to the statement of longer run goals and monetary strategy are codifying the way we're already acting with our policies to a large extent, we're already doing the things that are in there. this is just a way of acknowledging that and putting them in the document i can't tell you what the exact timing of that will be but i do think that's a sensible way to think about it thanks very much. >> thank you very much >> the end of the press conference with fed chair jay powell welcome to "closing bell," i'm

wilfred frost with sara eisen, the fed chair said haven't even thought about thinking about increasing rates, that allowed stocks to rise, the dollar to weaken, with a dovish takeaway a brophy pause in the middle of the dove sh take away talked about the economy saying it remains uncertainty, high-frequency data showed the pace of the recovery has slowed for now and the labor market has a very long way to go, still 14 million unemployed since february but the net conclusion, sara, very much a dovish one stocks high, very close to session highs with brief blip in between at 1.3% on the s&p 500. >> i'm going to correct one thing he said, we're not even thinking about thinking about thinking about raising interest rates, and he added a thinking about from the previous fed meeting. third derivative.

>> i didn't know if i misheard that i said two to be safe. >> there were three, which i only emphasize because it underscores the point you just made and the market is taking out of this. the fed is in it they are going to provide relief, he says. they are going to keep their programs in place well through and beyond we get through this crisis his biggest warning is not really anything new is that this is going to take a long time we have 15 million people out of work right now it doesn't just all snap back. i would say the other big takeaway from fed chair powell, it came in the statement and he reemphasized it a few times in the news conference is that the path of the recovery is going to depend on the course of the virus. he makes that point over and over came out of lockdown, spending shot up. cases again and let's bring in our panel. >> quickly on the market reaction, clearly all sectors are higher, all equities pretty

much are higher. interestingly compared to last month when we did get a very dovish outlook, commitment to keep rates low for a long time is that banks are very strong today,even though the 10 year-year-old 0.6, 0.5%. it's positive today, wasn't the takeaway last month. high across the board for sectors on s&p 500. >> really didn't do anything to ruin the party let's bring in the panel sarah bloom former federal reserve governor paul mccully former chief economist at pimco, dana and our own steve liesman. we'll keep it brief because we do want to get back to that tech panel going on steve, we'll give you the first word on what you think was the most important point from the markets from powell. >> so i think the idea he's confirming what we're seeing in high-frequency data, there has

been a stalling of the recovery. i think that's critical that he's seeing it we've got an idea how he's looking at the world my favorite quote is our job is not to plan for the upside case. the upside we have that covered. you get the idea how the federal reserve is looking at it i asked the question why the money is not getting out the door from the program. he said -- i don't know if we can run that sound on tape from the chairman here. do you have that quote in? maybe we don't have it okay in any event, what he said was we know we have a lot of money there but we want it there in case we need it in the future. surprised it's not a bigger issue among my fellow reporters there. if it's not, i suspect it will be soon. >> sara raskin, whether you thought he was more or less outlook for the economy than

we've heard in the last couple of months. >> right he had a difficult message while he was communicating to markets the fed stepped in, stepped in big and is going to stay in big, at the same time he has to acknowledge the unemployment situation is quite dire we've got 30 million people out of jobs. at the same time he noted that the number of job opens is not commensurate with the number of people looking he's starting to introduce this idea there's a gap between the number of people who want jobs and the number of jobs there are. that gap is going to be a highly depressing factor in terms of the economic outlook he has acknowledged it's going to take a long time to remedy. it's the biggest that we've seen in our lifetimes and it's going to have profound consequences for the contours of what a

recovery looks like. >> so paul, the obvious question out of that is what more can the fed do thanks to jasmine on our team, i asked her to count the number of times he said tool or toolkit. that's the key question. what's left to do if the economy doesn't come back quickly and they are so down beat. what's the answer, paul? >> i think he did what he needed to do, which is to say it's commerce's job to stand up and do with vigor what the fed has been doing i think this was as big a hand-off he could do in the context of the fed's independence i think the fed can do more things technically but i think he pounded the table its congress's job to make grants in the lending business and loans aren't necessarily the right remedy for a great deal of our

problems we need to have helicopter money from congress, period. that was essentially. >> by the way, it was 11. >> paul, why is that money sitting there? it's not being used. should the fed give it up, get grants going businesses are in need, closing now. you look at the percentage of the fed's balance sheet. the balance sheet has been declining since early june i'm surprised this is not a bigger issue that the fed -- the rule in government is use it or lose it. the fed has not been using it. >> happened been using because there hasn't been customer demand for it. they wouldn't naturally give it back it's up for congress to either take it back or simply allocate more money i think that's the right answer is independent of the unspent capital that treasury has for joint ventures under 13-3, congress simply needs to spend

more money. >> dana, i want to bring you into the conversation as well. what do you make of his outlook when it came to the jobs market? a sense, perhaps, he didn't expect that first jump in employment we saw over the last couple of months to continue what does that mean for your outlook and gdp. >> looking for minus 3% on gdp this year and a bounce back of 4.4% next year in terms of what chair powell said, very much so the case is going to be dependent on the buyers themselves. these are real people being affected serum when you did have a plateauing of the virus in the northeast, you did see jobs bounce back very quickly however, since mid june we have seen the number of cases rise quite precipitously throughout the remainder of the country

with very huge chunks of gdp infe effect we've seen cap ex and trade really collapse. unless you see cap ex pick up and trade pick up, it's very difficult to see very strong gains in unemployment. finally i would say that when you look again at the types of people who lost their jobs, in very heavy in services as chair powell said, some of these jobs may never be recovered. >> guys, we've got to leave it there. we could talk about the fed aling time, but it's a busy news day. thank you for joining us we want to take you back to the big tech hearing under way we're in for our second round of questioning. here is the subcommittee chairman. >> heartbreaking stories of small businesses who sunk significant time on amazon only to have them poach their best

selling items and drive them out of business. i want to talk about one company that really stood out from the rest i want you to play close attention to how they describe their partnership. we heard from a small apparel company that makes and sells use fl apparel for people who work on their feet and hands, like construction workers an firefighters this particular business discovered and started selling a unique item that had never been a top seller for the brand they were making about $60,000 a year on just this one item one day they woke up and found amazon had started listing the exact same product causing their sales to go to zero overnight. they had cut their price below what the manufacturer sold so even if they wanted to they couldn't match the price here is how the apparel company wrote about working with amazon. amazon strings you along for a while because it feels so good to get that paycheck every week.

we called it amazon heroin you kept going you had to get your next fix, your next check. at the end of the day you find out this person seemingly benefiting you, making you feel good, was just ultimately going to be your downfall. end quote. mr. bezos, this is one of your partners why on earth would they compare your company to a drug dealer. >> sir, i have great respect for you and your committee but i completely disagree with that characterization what we have done is create in the store a place -- you go back in time, we sold only our own inventory. it was a controversial deciding to invite third party sellers to come into what is really our most valuable real estate, product detail packages. we did that because we were quibsed it would be better for the consumer, better for the customer to have all of that selection. i think we were right. >> mr. bezos reclaiming my time reclaiming my time, mr. bezos.

this is one of many small companies that told us during this year long investigation they were mistreated, abused and tossed aside from amazon mr. bezos you said only focused on doing best for the customer and third party sellers. how is that possible when you compete with third party sellers with your own products that undercut the competition isn't it an inherent conflict of interest for amazon to produce and sell products on its platform that complete directly with third party sellers particularly when you, amazon, sets the rules of the game >> thank you no, i don't believe it is. the consumer is the one making the decisions. they are making the decision what to buy, what price to buy it at and who to buy it from. >> that's not the question the question is is there an inherent conflict of interest because you're a data company. you know when customers put something in their cart, take it

out. traditional brick and mortar stores don't have that i just want to follow up finally in answer to the question you gave to the congressman. you say you can't guarantee the policy of not sharing third party data with amazon's own line hasn't been violated. you couldn't be certain. can you please explain that to me can you list examples of where it has been violated it's particularly concerning to me, mr. bezos, shouldn't third parties know for sure data isn't shared with your own line, competitors? why should third party seller list on amazon if they are undercut by amazon's own product as a result of data you take from them. >> sir, i think what i want you to understand and i think is important to understand is that we have a policy against using individual seller data to

compete with private label products. >> you couldn't assure it wasn't violated routinely. >> we are investigating that i do not want to sit here and i do not want to go beyond what i know right now we are as a result of that "wall street journal" article we are looking at that very carefully. >> thank you. >> we want to get the facts and share them with you. >> thank you look forward to that the evidence we collected shows amazon is only interested in exploiting monopoly power e-commerce marketplace to further expand and protect this power. this investigation makes clear amazon's dual role as a platform operator and competing seller on that platform is fundamentally anti-competitive and congress must take action with that i recognize the ranking member of the committee mr. sensenbrenner. >> mr. chairman, i think the history proves congress does a poor job picking winners and losers i've looked over a lot of

material assembled i've been working with the chairman over a year on this bipartisan investigation, and i have reached the conclusion that we do not need to change our antitrust laws they have been working just f e fine the question here is the question of enforcement of those antitrust laws now, we've heard a lot about facebook acquisition of instagram. that happened in 2012. obama ftc signed off on that so regardless portfolio what you think has happened at that time, the fact is that this acquisition did pass the smell test of the regulators involved. maybe they made a mistake or maybe something else happened, i don't know, but the fact is that there is not a problem with the law. now, back about 35 years ago,

at&t was broken up because it was determined that one-stop shops were monopolistic. at&t, because you have to get your long distance service from your local phone company, that was monopolistic, so the baby bells were spun off. a whole lot has happened since then there were mergers and acquisitions in the telecom industry, technology advanced a huge amount. guess what we're back to exactly where we were in 1984 so this goes to show that congressional pressure is not the best now, using the at&t example, which i think was a big flop and counter-productive, let me ask mr. bezos, say the at&t example was applied to amazon, and you were required to spin stuff off.

you might have no more of a one stop shop, but you have to go to separate places for books or groceries or videos or electronics, how are the consumers helped by that >> sir, thank you. they would not be. >> right. >> very clear. >> mr. pichai, let me ask about google if you were forced to split your business line, youtube, you describe what happens to consumers there. >> congressman, today consumers in most of the areas we're dealing with, they see prices are free or falling and get more choices than ever before >> and you're right there. i'mnot going to be on this committee in the next congress i'm going to put my foot up and become a senior quote, unquote,

statesman. but let me say we have heard a whole lot of complaints about big tech some of emare political in natu -- a nature talk about activity. it's not for congress that legislates to toss the laws and precedent established through litigation over the past 100 plus years, but it's something where we ought to go back to the regulators, to the enforcers, have them look at this stuff and have them make a determination on whether or not the law has been violated. i think the law is good. we don't need to throw it all in the waste basket but there are some matters of concern that we have heard from

both sides of the aisle that i think need to be addressed and if it requires an agency like the ftc to say they have made mistakes in the past, so be it we're all human, we all make mistakes and even government agencies do that i yield back. >> i recognize the gentlewoman. >> you suggest to your management team moving faster and copying other apps could, quote, prevent our competitors from getting foot holds. sheryl sandberg responded, quote, it is better to do more and move faster especially if that means you don't have competitors build products that take some of our users facebook product management director added that, quote, i would love to be far more aggressive and nimble in copying competitors. has facebook ever taken steps to prevent competitors from getting

foot holds by copying competitors? >> congresswoman, i view it as our job to understand what people are finding valuable in all the services they use. certainly if someone -- >> do you copy your competitors? >> congresswoman, we've certainly adapted features that others have let in, as have others copied and adapted features that we have. >> i'm not concerned about others, i'm asking you, mr. zuckerberg since march of 2012 and that e-mail conversation how many competitors did facebook end up copying? >> congresswoman, i can't give you a number. >> less than five? >> congresswoman, i don't know. >> less than 50? estimates? your team was making a plan. how did it play out? >> congresswoman, i'm not sure i agree with the premise here. our job is to make sure we build

the best service for people to connect with who they care about. a lot is done by innovating internally -- >> thank you, mr. zuckerberg let me move on has facebook threatened to clone a company while attempting to acquire a company. >> congresswoman, not that i recall. >> i want to remind you you are under oath and there are quotes from facebook's own documents. prior to acquiring facebook started developing facebook camera, correct? >> congresswoman, that's correct. i've said multiple times we're competing in the space of building mobile cameras with instagram. that's what they did at the time their competitive set was companies like what we were building with facebook camera and -- >> thank you, mr. zuckerberg

did you use this similar facebook product to threaten instagram's founder >> congresswoman, i'm not sure what you mean by threaten. i think it was public we were building a camera app at the time that was a well documented thing. >> let me tell you in a chat you told mr. systrom that facebook was developing our own photo strategy so how we engage now will determine how much we're partners versus competitors down the line instagram thought that was a threat and confided in an investor at the time that he feared that you would go into, quote, destroy mode if he didn't sell instagram to you. so let's just recap. facebook clone a popular product, approached the company you identified as a competitive threat and told them that if they didn't let you buy them up, there would be consequences. were there any other companies you used this same tactic with while attempting to buy them

>> congresswoman, i want to respectfully disagree with the characterization it was clear this was a space that we were going to compete in one way or the other i don't view those conversations as a threat in any way. >> i'm just using the documents and testimony the committee has collected from others. did you warn evan spiegel, the founder of snapchat that facebook was cloning the features of his company while attempting to buy snapchat. >> congresswoman, i don't remember those specific conversations. that was also an area where it was very clear we were going to be building something. people want to be able to communicate privately. they want to be able to communicate with all of their friends at once, and we're going to make sure we build the best products in all the spaces around helping people stay connected with the people they care about. >> i appreciate that, mr. zuckerberg i think the question here is when the dominant platforms

threatens its potential rivals, that should not be a normal business practice. facebook is a case study, in my opinion, in monopoly power because your company harvests and monday tietizes our data ans it to spy on competitors to copy, acquire and kill rivals. you've used facebook's power to threaten smaller competitors and ensure you always get your way these tactics reinforce facebook's dominance which you then use in increasingly destructive ways facebook's very model makes it impossible for new companies to flourish separately and that harms our democracy, harms mom and pop businesses and harms consumers. mr. chairman, i yield back. >> gentlewoman yields back. >> thank you for being here today. i'm concerned you used facebook

to unfairly harm we've heard they use proprietary data from third party companies to launch its own private label products meets with startups to invest in products and uses proprietary data from these meetings for its products allows sale of counterfeit pop sockets ceo detailed how amazon allowed counterfeit products to appear on marketplace ahead of bob socket's products. he told cnbc it found 1,000 counterfeit for sale on amazon marketplace which amazon allegedly failed to remedy until pop socket agreed to a $2 million marketing deal with amazon we've also seen troubling reports in the "wall street journal" detailing amazon's use of third party sellers

proprietary data to market its own private label products "the wall street journal" reported last week amazon's venture capital fund used meetings with unsuspecting startup companies to gain a kz to secret proprietary product information and financial details. amazon reportedly used that information to launch competing products often disastrous results for the original startup company. there are many examples of this behavior one allegation in the journal's reporting sticks out in particular contacted vocal life, llc's inventor about the possibility of investing in speech detection technology vocal light accepted the meeting thinking this is the company's big break. after displays the microphone technology and providing proprietary information, including engineering data to amazon employees, the relationship came to an abrupt halt amazon employees allegedly stopped responding to e-mails

before the technology found its way into amazon's echo device of these allegations are serious especially because the size and scope of these practices couldn't happen without amazon's monopolistic control of the marketplace. i'm also concerned that given amazon's allowance of counterfeit goods in the marketplace, especially from china, that amazon's marketplace may be knowingly or unknowingly enforcing china's labor conditions this is following reports that at least 80 global companies that sell on the amazon marketplace, including nike, starbucks and samsung have ties to chinese that use enslaved uighur muslims following these reports senator holly introduced an important bill requiring businesses to certify that the supply chain does not rely on enforced labor. i will be introducing the house companion bill this afternoon.

why i do not expect intimate knowledge, i do want to ask all four witnesses a simple yes or no question. will you certify today that your company does not use and will never use slave labor to manufacture your products and allow to be sold on your platform manufactured using slave labor. mr. cook, you were kind enough to visit with me on the phone. i think we briefly discussed this issue if you can, give a yes or no answer, i understand you haven't read the details of the bill but would you agree to this idea >> i would love to engage on the legislation with you, congressman. let me be clear, forced labor is abhorrent and we would not tolerate it in apple i would love to get with you on the legislation. >> thank you mr. pichai. >> congressman, i share your concern in this area i find it abhorrent as well. happy to engage with your office

and discuss this further. >> i really don't even want to engage with my office half the time would you agree slave labor is not something you will tolerate in manufacturing your products or in products sold on your platforms. >> i agree, congressman. >> mr. cook? >> we wouldn't tolerate it we would terminate a supplier relationship if it were found. >> mr. zuckerberg? >> i agree we wouldn't tolerate this. if we found anything like this, we would also terminate any relationship. >> and mr. bezos. >> i agree completely. >> thank you very much, gentlemen, i yield back. >> i recognize the gentleman from maryland mr. raskin. >> thank you, mr. chairman i want to thank mr. buck for the excellent line of questioning and upcoming legislation i look forward to joining that we want -- in the 19th century

we had robber behrens in 20th century we have cyber barons, we want to make sure the extraordinary power and wemt you've been able to amassed is not used against the interest of democracy and human rights around the world and not against the interest of a free market at home mr. bezos, let me turn to you. i'm interested in the role that you play as a gatekeeper a lot of consumers want to know when the hbo app will be available on your fire device. i understand negotiations are ongoing but your company is not only asking for financial term but also for content from warner media. is that right? is that a fair way to proceed? in other words, is it fair to use your gatekeeper role in this streaming device market to promote your position as

competitor in the video streaming market with respect to content? >> i'm not familiar with the details of those negotiations. as you said, they are under way right now. i predict the company will come to an agreement and i think this is kind of two large companies negotiate an agreement, kind of normal -- >> here is why i pursue it because it is a large company and in a way they strapped in for hundreds of thousands of smaller companies in a more disadvantageous position with respect to negotiating with you. the general proposition you can speak to if you don't know the details of this, which is is it okay to negotiate not just for financial terms in having someone be part of your fire unit but also to try to extract in that negotiation leverage

with respect to getting content from them. >> again, i'm not familiar with the details. >> i'm not asking about that one. in general in general. >> in general i think when two companies are negotiating, you are negotiating not just the amount of money exchanging hands but also what you get in exchange for the amount of money. that's fundamental way the business works. >> do you see at least to outsiders that would look like a structural conflict of interest, like you're using your control over access to people's living rooms, essentially you are using that in order to obtain leverage in terms of getting creative content that you want are you essentially converting power in one domain into power in another domain where it doesn't belong >> i think what i should do is offer to get you information i'll get it to the office with you. i'm not familiar enough with

this i can imagine there will be scenarios, if we're talking abstract where it will be appropriate. i can imagine scenarios writ will be normal and very appropriate. >> fair enough i want to talk about emerging market smart homes i want to start with the hub of the smart home, smart speakers does amazon price the echo device before cost >> not it's list price but often on promotion sometimes when it's on promotion it may be below cost. >> several companies told us amazon is pricing echo devices below cost making it nearly impossible for them to and discounting alexa strategy to own the smart home like many products smart speakers with voice assistants like alexa and the myriad of appliances they interact with make up the ecosystem for tech companies to lock in customers

would you say the smart mom markets echo ring and smart device operate is a winners take all market yes or no? >> no, i wouldn't. if we're able to succeed what we want, we would like -- our vision is smart home should answer to different -- >> considering -- >> case by case. if we could achieve that, then you would get really good behavior on the part of competitive agents helping you. >> when you were looking at acquiring ring and wrote to your executive team we're buying market position not technology that market position and momentum is very valuable. so if smart homes are not a market with lockin effects why would leading market and momentum be so very valuable

>> sir, market position is valuable in almost any business and a primary thing one would look at in an acquisition. multiple reasons we would buy a company. sometimes we're trying to buy technology, ip, talent acquisition. the most common cases market position company has traction with customers, maybe first mover. could be any reason we have market position but that's a very common reason to acquire a company. >> once it becomes dominant, alexa smart speakers make up 60% of smart speaker market. mr. bezos when i ask alexa to play my favorite song prime music is the default music player. >> i think that's true if you're a prime member, yes be. >> "new york times" said when users buy batteries it says would you like to buy aa alexa

batteries. are they favored products when users use voice. >> the time has expired by the witness may answer the question. >> i don't know if it's been trained that way we do promote our own products of course, a common practice in business it wouldn't surprise me if alexa does promote our products. >> thank you the chair recognizes the next speaker. >> you said google doesn't work with the chinese military. that answer was deceptive because google works with many entities that work with chinese military and common lab calculation. just as one example would be xinhua university jeff dean, head of google ai served on computer science advisory committee for the university and then the university takes a nearly $15 million from china's central military kpligs. so you can see how if you don't

slow up at the chinese military offices if you're working together at the same place on ai that would lead to me concern. i want to talk about search. that's an area where i know gook has real market dominance. september 11th testified to judiciary committee and in response to a question from my colleagues about search, you said, we don't manually intervene on any particular search result but pleekd memos obtained by daily caller isn't true, just a week before your testimony, they describe a deceptive news black list. a process for developing that black list approved by ben gomes, who leads search with your company and also something called a fringe ranking, which seems to beg the question who gets to decide what's fringe in your answer, you know, you said to miss lofgren that there

is no manual intervention of search that was your testimony. i'm going to cite from from memo from daily caller from your company beginning of the work flow starts when a website is placed on a watch list it continues this watch list is main taped and stored with access restricted to policy and enforcement specialists. it does beg the question who these enforcement specialists are. access to the listing can be shared on a need to know basis to enforce or enrich the policy violations the investigation of the watch list is done in the tool athena, the aries manual review tool so you said to congressman lofgren there was no manual review tool and your documents indicate there is a manual review tool. help us understand the inconsistency. >> congressman, there are two parts to this.

in general we algorithmically test results and we tyus user feedback and use it to validate last year we ran over 300,000 experiments and launched around 3,000 improvements to search and we don't manually tune the question in the context, is there someone behind the curtain manually tuning an individual search result. we don't generally approach it algorithmically. however, to comply with the law in every country we are in there may be a website interfering in elections. we then have to put that site on a list so that doesn't appear in our searches and queries so other examples would be violent extremism -- >> is that done manually, mr. pichai that process you describe is

that manually? >> we can get reports from law enforcement agencies, complying with a known -- >> there's either a manual component or not a manual component. which is it? >> for creating the list, a manual portion. >> that is sort of the concern that i have. you have now said something different than you said -- >> the congressional hearing of the leaders of google, amazon and facebook we will rejoin in a moment but we have some earnings news and some breaking news on qualcomm john has it for us hi, john. >> hey, first of all earnings out, a beat on top and bottom and a guide for the current quarter that's better than some expected equally important, perhaps more important to investors, qal congresswoman entered into a settlement agreement with whaump, a long-term global

patent agreement with huawei, includes license, a $1 billion payment for previous license fees not paid and then guidance includes the expectation that huawei under this agreement will continue to pay license fees going forward. i did just get off the phone a few minutes ago with qualcomm ceo and qualcomm's cfo as well talked about what's happening global in the smartphone market amid this pandemic told me it's remarkable how china is responding that it is coming back strong in the recovery 63% of new phones there are 5g enabled. he did say that the developed world is coming back more strongly than emerging markets are. overall, the overall market, qualcomm expected the june quarter can be down 30% year over year. it's down 20%.

they are projecting september quarter revenue wise down 15%. things continue to strengthen. developed countries like north america are coming back stronger than emerging. this could be a bit of a read through for earnings like apple earnings i asked specifically about north america and the mix. was there a mix more toward lower end of the smartphone market what they told me is the mix is about the same in every market whether you're looking at developing or developed, it's just that developed markets are coming back stronger overall now i did talk to them as well about the projection for 5g units. they are sticking with 175 to 225 million 5g units for the year but do believe it's going to be toward the higher he said of that guide versus how they felt earlier, guys that call will start at 4:45 and, of course, we will continue to monitor. >> john, quickly the agreement with huawei, is this going to

face heat from the administration >> no, i don't believe it will licensed for qualcomm's technology it just means when huawei is building phones with qualcomm technology included, qualcomm is not a manufacturer, creator of ip for 5g technology if they are going to have 5g technology they they'd to pay qualcomm for it. i would think administration would have more concerns with they were using american technology with ip an not paying for it. >> thanks so much for that mike santoli and ceo josh brown here to discuss this, the hearing, fed decision and market close. i'll come to you first really seeing these hearings didn't affect tech stocks, one of many leaders in the market. >> didn't affect tech stocks

really the fed decision did not disturb investors expectations what was going to go on there. both front left in tact. that's the way to read things. if anything the tech hearings, the fact they did sometimes stray all over the place away from antitrust, it did not give anybody nip specific substantive reason to believe the congress is going to be a different congress going to do anything to disturb business models at least for now. overall the market was pretty place i had about taking t-- pl. they were reassuring about the open ended nature of the fed's commitment to support the economy, do asset purchases, calling them accommodative not just improving market functioning. it ticked off a lot of the boxes but i don't think really it moved the market equation very much versus what was expected going in.

>> 1 1/4 percentage gains for s&p 500, josh brown, best day since july 4th so in a few weeks, what was your reaction to tech titans testify? >> sara, to put my reaction in one word, i would say merthful, two discussions on parallel trashing, one about practices and how about blog posts from breitbart i'm dying to read don't make it into my facebook feed and my grandma's facebook feed i'm merthful because as a student of history i remember the threats about breaking up the first guilded ages barons and what would for shareholders, a bonanza for stockholder concerns what you would consider worst-case scenario for jeff bezos and they tell him youtube

has to be separate or ad tech has to be separate, whatever the case may be, or in the case of google, in any of these company's cases they roll up 1 1/2%, if they were to break up, it would be a bigger value creation moment for shareholders than what they have had already. go back to john d. rockefeller, standard oil in 1906 he was sued. it took five years finally for the supreme court to get that decision they rule against him. his net worth balloons to $900 billion, equivalent today. standard oil of new york, which becomes mobile, doubles in value. standard oil of new jersey, which became chevron, regardless of what the names were, all of these became the oil companies we know and love today and they all become bigger. a separate stand alone instagram. imagine the value creation in something like that. i really don't think tech investors have been terribly

concerned about a breakup. but even if a breakup were to happen, that's not a death sentence for any of these companies or their shareholders. in fact, it could be tremendously administrative. >> merthful is a good s.a.t. word sorry to be brief. finish lowered 2% after missing on arranges estimate one bright spot the music streaming platform saw monthly active users grow 29% cfo paul vogel joins us for an exclusive interview. paul, thanks for joining us on the back of those results. >> great thanks for having me. >> one thing that hit shares according to analysts, revenue was a bit light even though user numbers are strong what do you attribute that to? >> revenue in line with expectations rpo down in the quarter about

2%, hit about 7%, 1% hit from one-time item that impacts us in the quarter. revenue in line. generally we feel really good about the quarter as you mentioned. users up, subscribers 27%, above expectations at the high end of our guidance winning-orange. when we look at trends given all that's gone on globally we feel good about the trend added more users in the first half of 2020 compared to first half of 2019 and same with subscribers. more on the subscriber side and user side we feel good about how we're progressing through the first half of the year. >> should mention the stock had a monster year, more than 75% for 2020 you noted listening hours have returned to levels from before the pandemic how is that happening with so

many not returning to daily commute. >> i said listening hours have come back in markets where the pandemic seems to be moderating we see listening come back a a lot, across the board above pre-covid levels you mentioned the commute. when we exited q1 listening in the car was down 40% at the peak, down 40% in april and now down only about 10% from where it was at the peak we're seeing it across the board. also we've done a number of things to give people opportunities to listen to music, podcasts in different formats, at home through smart speakers and game consoles have done well for us as well we feel really good about some of the opportunities we have to continue to grow listenership even with all that's going on. >> i want to talk about podcasts you've made a lot of headlines this past quarter. one of the reasons investors excited, flashy deals, michelle

obama reviewed her podcast today. talk us through the strategy you think bringing these names will bring in new paying customers? >> yes for us it's really about audio first, building out the music side and podcasting side what we've seen are podcasts are growing really, really well. 21% of our users engage with podcasts up from 19% in the first quarter. we believe having unique content on the platform, having exclusive content and podcasting will really differentiate us from other players we look at some of the things we've done when we go all the way back to acquisitions last year and the ringer this year, the licensing deals we've done with joe roggin. exciting was the launch of michelle obama's podcast which launched this morning which we're very excited about. >> how did it do any early numbers? >> i don't have any early

numbers but we're very excited about the opportunity. >> as you know, paul, we have been glued to this incredible testimony from the top tech titans including apple ceo tim cook they are testifying about antitrust. one of the issues apple faced and one of the questions he faced is one you know well related to the app store here is how cook addressed these issues on the panel earlier. >> there's a competition for developers just like there's a competition for customers. and so the competition for developers, they can write their app for android or xbox or playstation. we have fierce competition on the developer said and customer side, which is essentially it's so competitive i would describe it as a street fight for market share in the smartphone business. >> paul, he's defending the app store you criticized as enabling tons of competition.

you're part of the regulatory complaint for the eu which has opened investigation into the apps store what do you say to tim cook? do you argue with the fact that he says it stimulates competition? >> as a platform they are also a gate keeper. for us it's about not having programs in place that disadvantage competition or things that put restrictions on competitors competitors. the 30% fee in the app is obviously restrictive. our ability to properly message and communicate with our users is also restrictive. for us we're looking for a level playing fields that our streaming service is competitive with what they offer. >> your growth rates are pretty incredible as you outlined in the quarter. are you saying apple is holding it back? >> look, i think our growth has been phenomenal. i think we've done exceptionally well despite restrictions in front of us. the question, how much better would we have done had we not

had restrictions placed against us. >> paul vogel, we appreciate your time. >> thank you so much. >> certainly to the tech hearing. paul vogel, cfo of spotify wilfred. >> perfect thing to pivot back on get back to the big tech hearing on capitol hill. >> acts like it's not responsible for conterfeits sold by third party sellers on its platform we've herald amazon puts burden and cost on owners to police amazon's site even though amazon makes money when a counterfeit good is sold on its site more than half sales come from third party seller accounts. why isn't amazon more aggressive in ensure krfcounterfeit goods not sold on the platform and why isn't it responsible for keeping all counterfeit products off of

its platform. >> this is an incredibly important issue and one we work hard on. conterfeits are a scourge. they are a problem that does not help us earn trust with customers. it's bad for customers, bad for honest third party sellers we do a lot to prevent counterfeiting we have a team of more than 1,000 people that does this. we invest hundreds of millions of dollars in systems that do this we have something called project zero which reps brands serialize individual products which really helps with counterfeiting. we have other programs as well. >> i'm glad that you have those features in place. but why isn't amazon responsible for keeping all counterfeit products off of its platform >> we certainly work to do so, congressman. we do so not just for retail

products but third party products as well. >> thank you we've heard from numerous third party sellers and brand owners that amazon has used knock-offs as leverage to pressure sellers to do what amazon wants. for example, the founder of pop sockets testified in january that amazon itself was selling knockoffs of its product after reporting the problem, it was only after his company committed to spending $2 million on advertisements that amend appears to have stopped diverting sales to these knockoffs. what is your explanation for that business practice >> that's unacceptable if those are the facts, if someone inside amazon said buy x dollars in ads and we'll help you with counterfeit problem, that is unacceptable i'll look into that and we'll

get back to your office with that what i can tell you, we have a counterfeit crimes unit. we tem attempt to prosecute counterfeiters i would encourage increased law enforcement to go after counterfeiters because they are bad actors. >> you make money off of counterfeit goods sold on your platform isn't that correct >> if it does in my view, sir, it would only be in the short-term i would much rather lose a sale than a customer. >> fair enough, sir. making companies pay extra to avoid having their products disappear in ranksings seems to be unfair especially to small businesses the american dream it threatened. >> i'm in the sure what you're talking about.

if you're talking about a second ago -- >> total ly different situation a company selling on your platform but not paying anything extra gets buried in the rankings but companies that pay extra are able to get their products pushed up and avoid getting pushed down. is that an acceptable practice >> sir, i think what you're referring to is the fact that we offer an advertising service for third party sellers to drive additional promotion to their products that's a voluntary program some use it, some don't. it's been effective at helping people promote their products. >> with that i yield back. thank you. >> gentleman yields back the committee will stand in brief recess >> well, of course, rejoin the

conference, the capital hearing there with the leaders of google, apple, amazon and facebook when it restarts after that short recess. sara eisen and mike santoli with us and our reporters will be joining us in a few minutes. we're hearing representative johnson focusing on why it has counterfeit goods. others including for facebook whether or not it was too aggressive in instagram or attempted acquisition of snap and on amazon whether it's abusing its position particularly relates to small business platform. not really impacting the stocks at all. >> the unifying theme with all the questioning is using very strong market positions for competition and to muscle vendors and suppliers and

obviously privilege their own products with customers. it's interesting that -- first of all, i think a lot of these issues are familiar. there's not really been a lot of news accept documented instance for certain tactics investors would have to pay much attention to on the other hand you can look at realities of how dominant they are and getting evidence of influence and the power of their platforms. if you don't think it's going to change it reins forcforces genel idea they are producing more than their share for overall profits of s&p 500 that's perhaps why the market itself aren't seizing on the points of vulnerability with a lot of questions. >> we've got a team of experts here to help us that cover these companies, julia boorstin, of course, on facebook, deirdre on google and amazon, josh lipton on apple my biggest question, we'll

start, deirdre with amazon they did face tough questions here i think about dominance and abuse of power it's coming at a time when more americans are using amazon and needing amazon we're home and during the pandemic we're not in life as normal. i wonder if this accomplishes anything, sway public opinion against these companies that particular drive any action. >> sara, it's a good point i like the way josh brown put it there seems to be two dual tracks, one focused on antitrust which they set out to do, the other on privacy and politics and whether google algorithm, help joe biden win an election i think the latter half distracted from what congress is trying to do here, which is put in place new legislation that would reshape digital landscape. when it comes to amazon and jeff

bezos, this is the first time we've seen him in front of congress did he perform in the jury is still out. he faced tough questions particularly from representative jayap jayapal, she's from washington, met with amazon executives in the past she really grilled him on what they do with third party data. i think we have a clip from one of those exchanges so maybe we can play it right here maybe not, sara. sorry about that basically she asked them, she said, does amazon restrict the information and data points from third party sellers of bezos said he couldn't answer yes or no there may have been employees at amazon that went against that policy not a strong point from him. it took nearly two hours to get to jeff bezos but he has seen the brunt of the questioning as

well as google ceo pichai. he's received tough questions about google's market play and search engine and how that may stifle competition back to you. >> julia, as it relates to facebook, what did we learn new and potentially damaging as it relates to their fight back against threats of instagram and snap during the years. >> that conversation was most revelatory the question being whether or not facebook will copy services by instagram and snap at the same time trying to buy them whether facebook was trying to crush its competition. zuckerberg was very much on the defense saying it's very typical for them to be inspired by other apps and services out there and he believes other companies are inspired from them the way they take from other companies. not sure how well that went over but a particular area of tension

around that exchange about how much they are copying. there was one exchange where he was asked repeatedly how many competitors did facebook end up copying. he didn't have a number to respond to that. >> i think he said we donadopt. he said we see what others are doing and adopt. he wouldn't use copying like others were doing. that i think so britney us to tim cook he didn't see a ton of questions. he was the smoothest he's had experience facing members of congress. we did get tough ones at the app store on antitrust and whether it stifles growth of startup. >> did not feel the brunt like some of his peers did nor sure he came with a pretty clear message. the message was in his opinion

they don't have dominant market share in any business they compete in talk about hardware. cook believes he has the best smartphone out there the message he tried to convey on the hardware side we have to compete and compete hard with big, entrenched, powerful rivals whether samsung or google. 40% of smartphone in the u.s. in the first quarter of the year were from apple according to third party research to your point, questions about the app store, certainly high-profile well-known developers made pretty harsh criticisms about the app cook pushing hard on those criticisms saying as he sees it competition alive and well in the apps store he points out 1.7 million apps available. he made the point most apps are free when he does charge that commission rate, the commission rate he argued to lawmakers in line with other digit tal

marketplaces, guys. >> that's certainly an issue spotify's ceo was taking earlier. we'll leave it there that hearing is due to restart again any minute now, so we will dip back into that and bring headlines as and when we get them meantime shopify shares, not spotify soaring after reporting a 97% jump in revenue. that applies to red hot tock about 170% this year up next we'll ask e-commerce company's chief operating officer about what's driving the growthndhe a wther we're seeing a permanent shift to online shopping we'll be back in a couple of minutes. that's right. unlimited and nationwide 5g for the whole family for just $25 bucks a line. only at t-mobile. snhu let's you transfer up to 90 credits - [announcer] if you've tried college but never finished, toward your bachelor's degree. - [woman] it doesn't matter how old you are, you can do it. you can finish.

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brought in $700 million plus with revenues nearly doubling

from a year ago. joining us harley finkelstein shopify's ceo. thanks for joining us. >> thanks for having me. >> strong numbers this morning and share price reflects that today and of late. to what extent is that a long-term structural shift you've been enjoying over the last couple of years as compared to quarterly effect because of covid? >> our mission from day one has always been to help small businesses and level the playing field. frankly it feels like now small businesses and entrepreneurs need that now more than ever this is a story i think of great independent small business entrepreneurs finally being able to connect with consumers, finally being able to have the technology they need to compete with the biggest companies in the world. it feels like the year 2030 in terms of what retail looked like then has been pulled back the year 2020. the success of shopify is the success of independent businesses all over the world. we're starting to see small business will be the driving force and the ones rebuilding

our economy after the pandemic but in terms of how it's going to continue, we went from 5% of total retail sales e-commerce 10 years ago to close to 15% in the last couple of years, now we're close to 30% i think some of these new trends, the fact digit talizatita alization. >> only retail sales you are 6%, amazon 37% where would you like that number to be in five years' time? >> the most important part, i think, was if you were to pretend shopify is a single retail -- if you were to pretend we were, we would be the second largest in america to scale payments or capital or shipping, all these things we now get leverage with we can distribute to those economies of scale and further level the playing field. there isn't percentage we're trying to achieve in terms of

retail what we are seeing is consumers are voting with their wallets to support independent brands and retailers. that is why we've seen so much success in small businesses last month. >> harley, magnitude and duration of future remain uncertain and likelihood of recession, didn't give guidance. why don't you feel confident in trends continuing. >> no way to predict, no way to see e-commerce grow from 30% of retail to 50% in the last three or four months or so what we are trying to do is make sure any small business that wants to compete, enter and be resilient has the tools to do so i think a lot of people for a long time assumed shopify was e-commerce for small business. we're seeing ship on thelies, snicker's are acting entrepreneurial.

as a product beyond e-commerce selling physical stores as well, helping them with capital. 1.2 billion to malbusinesses these are things they couldn't do on their own. we are the entrepreneurship company and that's being understood >> harley this is a great problem to have. do you regret in any way how you price the product, a flat fee for most customers as you cross a certain mark take a percentage of their sales. that percentage is limited by maximum dollar per month i believe i'm right on all of those. do you wish you had more sales as companies grow and grow faster as opposed to arbitrary dollar limits? >> to be clear, we make it easy to get started if you want to start a business on shopify, $29. as you grow to become a leader in category, fashion nova-type company or bombas, any category leaders we do share in their upside and gm v which is why

you've seen gmv grow 20% year over year as we announced this morning. >> do you think, harley, amazon is anti-competitive to the topic of the hearing we've been watching all day today and how big a competitor are they to you? >> we don't compete with amazon. our merchants compete with amazon we think the future of commerce to survive and thrive it needs to be in the hands of many not the few. we like a future of retail that looks like many, many, many small businesses not single companies. >> when we consider the themes of 2020 particularly because of the covid, do you think you've seen such fast growth because just typical shoppers have gone online or because you've also seen people who may be forced into a situation decide to start a business all together in the way they stayed safety of their job they may never have taken that risk? >> certainly entrepreneurship is on the rise. as i mentioned earlier entrepreneurs and small

businesses will be catalyzing factors to get the economy back on track that being said, i think there has been increased demand from consumers and consumer preferences have changed they do want to buy direct from brands we've seen that. direct to consumer as a trend has been around for a while. it should have been steady state. the issue was a lot of independent brands didn't have tools, technology, access to sell direct to the end consumer, now they can then also brick and mortar businesses, a big part of shopify's business and product offering who were going to digitalize what the pandemic did forced that to happen right now we were there with great software and great technology to make it easy for them. >> you've got a fan, jim cramer has liked the stock and a fan of yours. investors always love tam, total addressable market, very sexy term what do you think about what that is for you in terms of how big this could get

>> we started 15 years ago helping very small companies set up beautiful scalable online stores and now we really are becoming the first retail operating system we've seen small businesses that start at their mom's kitchen table, going back to those gym sharks of the world that becom category leaders, we've seen some of the largest brands on the planet, procter & gamble setting up shop on shopify we believe our tam is bigger than anyone expected fundamentally as retail shifts online, we seem to be the best place -- we are the best place and technology for it. they need something nimble, quick to access. they want to access the ability to sell on social media or have accelerated check-in that comes standard on shopify. we make it easy for them. >> do you think on payment side you will be able to cut out traditional players. >> i'm not sure.

we have a payment business with shopify payments and now more shop pay as well introducing installments as well we are trying to figure out what we do and how can we anticipate what retailers and brands do in the future and make sure it's baked in also geography, we see international companies alternate payment methods or debit cards, for example the idea is when you come to shopify you should have access to all the tools you need for a successful business, whatever those tools may be. >> quickly, you mentioned international, how penetrated are you outside the u.s., is that a big opportunity as well >> it is historically it's admin, has been english only. two years ago we began to translate it to integrate with new partners in the local geographies. international remains a big part of our future. >> harley, thanks for joining us appreciate it. >> my pleasure thank you so much. >> shopify

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new companies are created all the time all over the world. history shows if we don't keep innovating, someone will replace every company here today. >> you're saying the more user data doesn't moon more money google can collect. >> congresswoman, most of the data we collect is to help users experiences. >> in your own words you purchased instagram to neutralize a competitive threat. if this was an illegal merger at the time of the transaction why should instagram be broken off into a separate question. >> i think ftc had documents to review this and unanimously voted at the time not to challenge the acquisition. >> what i can tell you, we have a policy seller specific data to aid our private label business but i can't guarantee you that that policy has never been violated. >> this is one of your partners. why on earth would they compare

your company to a drug dealer. >> controversial decision to invite third party sellers to come into what is really our most valuable retail, product pages. we did that because we were convinced it would be better than the consumer. >> what's to stop apple from increasing its commission to 50%? >> sir, we have never increased commissions in the store since the first day it operated in 2008. >> there's nothing to stop you from doing so, is it >> no, sir i disagree strongly with that. >> earlier during the hearing. the break has ended. let's get back live and listen to jeff bezos. >> is that different from perhaps a list or product ranking we do make public for all. >> i want to make concluder does amazon use aggregate value for brands when there's only three sellers for a product? >> yes, sir.

>> does amazon look at aggregate data when there's two sellers of a product? >> yes, sir. >> am i correct amazon is conducting internal investigation on the use of third party data >> yes we're basically trying to understand some of the in the "t journal" article. >> will you commit on informing this committee on the outcome and when amazon is allowed to use and or view aggregate data. >> yes, we will do that. >> musics could be used to drive revenue on -- there is a reason it is important and i want to talk about twitch for a second news reports have indicated that twitch users are receiving notice and take down requests pursuant to the diggal copyright act and twitch allows users to stream music but does not license the music, is that

correct? >> i'm going to have to ask that i could get back to your office with an answer to that question. i don't know. >> okay. well so that would be great. and then so two more questions relating to that if twitch is responding to take down requirements, should we -- should, one, twitch consider proactive licensing music instead of reto actively adhering to those noticed. i'm primarily concerned about small up and coming musicians, that aren't labels to make it easy for them to get cease and desist notices out as well and as we continue to move forward there. >> yes, congressman, that is an important issue and i understand it and we'll -- i'll get back to your office on that. >> all right earlier this year google announced plans to retire third party cookies that websites attached to users' browsers and athis allows users to be tracked across the internet. a consequence of that change is that it will put other digital advertising market participants

at a disadvantage because they could no longer track users. now at very, very danger of being pro-cookie, because i'm not, when i use my computer as well, and i understand that there are a legitimate privacy concern with third party cookies but i want to focus on the competition aspect did this action also place google at a disadvantage or does google have alternative means of collecting the user data to inform its digital advertising activities, mr. pichai. >> congressman, as you rightly pointed out, this is an area where we focused on user privacy and users clearly don't want to be tracked by their party cookies. in fact, other browser vendors including from apple and -- foundation have also implemented the changes. we're doing it thoughtfully, giving time for the industry to adapt because we know publishers depend on revenue in this area but it is an important change and i think we have to be

focused on privacy to drive the change forward >> but you have other ways of collecting that information, correct? >> on our first party services, we don't rely on cookies and obviously people come and pipe into search -- >> i'm not asking if you rely on cookies. i'm asking if you have other ways of collecting it, through g-mail or consumer facing platforms. >> right. >> we don't use collection data from g-mail and if users have -- yes, we do have data. >> thank you, i yield back >> gentleman yields back i recognize mrs. demings. >> mr. zuckerberg, during the discussion of changing facebook platform policy in 2012 and i quote, in any model we assume our policy against competitors much more strongly. it sounds like facebook weaponized to

target competitors why would facebook enforce policies against competitors more strongly >> congresswoman, when we were a much smaller company, we saw -- >> this is 2012, now this is in 2012, so please, go aright ahead. >> sure. we've had policies in the past that have prevented our competitors, which at the time we were primarily worried about larger competitors, from using our platforms to grow and compete with us. so we had some of the policies we continually review them over time and -- >> so mr. zuckerberg in 2013 a senior facebook employee identified message me as a fast growing app on facebook and said that we will restrict their access was this another example of enforcing facebook's policies against competitors much more strongly

message me. >> i'm not familiar with that specific example but we did have that policy. >> let's move to another one and see if you remember this one in 2014, other facebook product managers openly discussed removing pinterest access to facebook platform two as one employee said i'm 100% in favor of the idea of moving it from pinterest but i'm not recommending removing it from netflix going forward. why would facebook product managers want to restrict pinterest's access facebook but not netflix? >> congresswoman, i'm not familiar with that exchange. i don't think i was on that. >> why do you think -- you wouldn't have to be on that. but why do you think they made that decision? or would make a decision like that >> well, congresswoman, as i said, we used to have a policy that restricted competitors from using our platform and pinterest

is a social competitor with us that is one of the many competitors that people share -- >> okay. mr. zuckerberg, the examples and supporting documents strongly suggest that facebook does weaponize its policy platform and enforcing them selectively to undermine competitors but let's move on. mr. cook, i'm concerned that apple policies are picking winners and losers in the app economy. and that apple rules mean apple apps always win. mr. cook, in 2019 apple removed from the apple store certain apps that helped parents control children's devices do you remember what justicification airpla justification apple cited? >> yes, i do the use of technology called mdm, mobile device management placed kids' data at risk and so we were worried about the safety

of kids. >> okay. all right. so you were concerned about that the app basically undermined kids's privacy but another app was app-sure, an app owned by the saudi arabia government, do you recall what apple's position was towards this app >> i'm not familiar with that app. >> okay. apple allowed this saudi app to remain so there are two types of apps, they use the same tool apple kicks one out and said that this -- one that was helping parents but keeps the one owned by a powerful government if that is connect, mr. cook, that abscess supposedly did the same thing, why would you keep the one owned by a powerful government >> i'd like to look into this and get back with your office.

>> because it sounds like you applied different rules to the same apps. >> we apply the rules to all developers evenly. >> do the fact that apple. >> we were worried about -- >> we're going to continue monitoring the hearing we're going to bring in for some reaction facebook former chief privacy officer and general council chris kelly. do you think mark zuckerberg might create pressures by himself by mentioning they've copies tools of other rivals and bought some past competitors. >> the things that is critical to realize about anti-trust law is that it protects competition and not individual competitors so it is not illegal to compete in those ways. if it is shown to have market power and shown to leverage that market power improperly, then you could act against it

the instagram acquisition was reviewed by the federal trade commission there was a second request for documents and it was unanimously approved by the federal trade commission it can be challenged it is certainly possible but on existing legal standards it is hard to say that there would be any action taken. under current law. you would have to potentially have any laws around what platforms can acquire other potential platforms. and you would have to redefine the entire idea about how you define a relevant anti-trust market to get there. it is not illegal for a company that has a lot of general power, if it doesn't have anti-trust market power to actually compete. or to buy a potential competitor. >> chris kelly, thanks, as ever for your candor on that topic. mike santelli, clearly the hearings did not hurt the stock prices for the companies tomorrow we have earnings. >> that is the question as to whether that would cause a rethink. the pattern has been to sell the

earnings news, not just for the high flying tech stocks so we'll see if that changes tomorrow it seems like most investors are focusedond liquidity and the secular growth as opposed to what happened over the last three months. >> we're out of time here with all of those hearings today. thank you so much for tuning into "closing bell." "fast money" starts right now. >> "fast money" does start right. i'm melissa lee. guy adami, tim seymour and bono and icen and tonight no pain no gain that is the message from mike wilson, where he sees stocks headed on august plus boeing hitting new headwinds we heard from the ceo when he expects air travel to return to normal and we're all over the action, qualcomm and pay poll reporting results, how we are paying the earnings moves big day on capitol hill. let's take a live look where the facebooks of facebook, apple, amazon, alphabet testifying