On The Money: Senators unload on Facebook cryptocurrency | Tech giants on defensive at antitrust hearing | Democrats ask Labor Department to investigate Amazon warehouses

On The Money: Senators unload on Facebook cryptocurrency | Tech giants on defensive at antitrust hearing | Democrats ask Labor Department to investigate Amazon warehouses
© Greg Nash

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THE BIG DEAL--Senators unload on Facebook cryptocurrency at hearing: Facebook on Tuesday sought to defend its plans for a new global cryptocurrency at a contentious hearing as lawmakers aggressively blasted the project and questioned whether the embattled company should be in charge of launching such an ambitious venture.

David Marcus, head of Calibra -- the new Facebook subsidiary that will be partially responsible for launching the cryptocurrency -- assured lawmakers that the Libra coin will not launch until financial regulators are satisfied.

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But Marcus's testimony did little to quell concerns from bipartisan lawmakers on the Senate Banking Committee, many of whom delivered blistering condemnations of the company's plans.

 

The big hangups: Facebook executives have spent weeks meeting with regulators and lawmakers behind closed doors, and the hearing on Tuesday offered a first glimpse into how few inroads the company seems to have made with skeptical policymakers.

Another obstacle is the lack of clarity over which regulators would be responsible for overseeing Libra's compliance with federal financial, data privacy and consumer protection laws.

Lawmakers such as Sens. John KennedyJohn Neely KennedyMORE (R-La.) and Brian SchatzBrian Emanuel Schatz'Medicare for All' complicates Democrats' pitch to retake Senate Criminal justice reform should extend to student financial aid Booker, Durbin and Leahy introduce bill to ban death penalty MORE (D-Hawaii) asked why Facebook should assume responsibility for the enormous undertaking, given the level of mistrust surrounding the company from the public and Washington.

But the criticism was not equally fervent on both sides. Several Republicans defended Facebook against the harshest rhetoric from the Democrats, calling Libra an idea with "tremendous potential benefits" and a "commendable" mission.

"To announce in advance that we have to strangle this baby in the crib is wildly premature," Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyNSA improperly collected US phone records in October, new documents show Overnight Defense: Pick for South Korean envoy splits with Trump on nuclear threat | McCain blasts move to suspend Korean military exercises | White House defends Trump salute of North Korean general WH backpedals on Trump's 'due process' remark on guns MORE (R-Pa.) said.

The Hill's Emily Birnbaum and I take you there.

  

ON TAP TOMORROW

 

LEADING THE DAY

Tech giants on defensive at antitrust hearing: Four of the nation's largest tech companies sought to reassure skeptical lawmakers over their market power as the House ramps up its antitrust investigation into Silicon Valley.

Executives from Apple, Amazon, Facebook and Google testified before the House Judiciary's antitrust subcommittee on Tuesday in a hearing examining the effect that their size has had on small businesses and their ability to innovate.

Each insisted that their platforms help smaller businesses reach customers and that they face stiff competition. But the companies faced plenty of skepticism for lawmakers in both parties, who pressed the firms on whether they use their immense reach to skew markets in their favor.

The Hill's Harper Neidig tells us more about what went down at the hearing.

 

The flashpoints:

  • Nate Sutton, Amazon's associate general counsel, was forced to repeatedly insist to incredulous lawmakers that the company does not use the consumer data it collects to give its own products an advantage over those of third-party sellers.
  • Matt Perault, Facebook's head of global policy development, said that the company does not research social media trends in order to find and purchase potential competitors to maintain its dominance, despite a 2017 Wall Street Journal story that reported it had used a surveillance app that tracked user behavior to influence its acquisitions.
  • Google's director of economic policy, Adam Cohen, also insisted that it faced competition in the internet search industry from the privacy upstart DuckDuckGo, Microsoft's Bing and Yahoo. And he said that users turn to other platforms when searching for things like retail products and travel arrangements.
  • Spotify, which competes with Apple Music and has filed an antitrust complaint against the iPhone maker in Europe, pressed its case with the committee in a letter arguing that Apple stifles competition by "essentially acting as both a player and referee to deliberately disadvantage other app developers."


Democrats ask Labor Department to investigate Amazon warehouses: A dozen Democratic lawmakers sent a letter to the Department of Labor Tuesday asking it to investigate Amazon for potential workplace abuse as employees at a Minnesota center protested what they called unfair and unsafe conditions. 

The letter, led by Sen. Bernie SandersBernie SandersVolatile presidential polls spark new round of anxieties GOP memo deflects some gun questions to 'violence from the left' British Bookmaker: Warren has replaced Biden as Democratic primary favorite MORE (I-Vt.) and Rep. Ilhan OmarIlhan OmarMaher rails against anti-Israel boycott movement: 'A bulls--- purity test' for Democrats Pelosi hits Trump, Netanyahu for 'weakness' amid tensions over Omar and Tlaib Ocasio-Cortez brushes off Trump tweet claiming she is 'fuming' over Tlaib, Omar attention MORE (D-Minn.), calls on the Occupational Safety and Health Administration (OSHA) to look into conditions at all Amazon warehouses. 

The letter cites reports of unsafe conditions, as well as personal accounts the lawmakers said employees have shared with them. 

  • "Hundreds of stories shared with our offices paint a picture of desperation and a corporate employer with little regard for the health of its employees," the letter reads.
  • One worker described the warehouse as a "21st century sweatshop," and other workers said there is no air conditioning in facilities, according to lawmakers.
  • Some Amazon employees said they feared retaliation for bathroom breaks and would limit the amount of liquids they consumed, and one said they took medication to not have to use the restroom, according to the letter. 

Amazon, in a blog post, denied the allegations of unsafe conditions and renewed an open invitation for lawmakers to tour facilities. 

 

Tax treaties finally on the move: The Senate on Tuesday ratified a protocol updating a tax treaty between the U.S. and Spain — the first of four agreements that are slated to get a vote this week after they were stalled for years.

The protocol with Spain was approved by a vote of 94-2. Sen. Rand PaulRandal (Rand) Howard PaulGraham promises ObamaCare repeal if Trump, Republicans win in 2020 Conservatives buck Trump over worries of 'socialist' drug pricing Rand Paul to 'limit' August activities due to health MORE (R-Ky.), who has long objected to the treaties the Senate is considering, and Sen. Mike LeeMichael (Mike) Shumway LeeMcConnell, allies lean into Twitter, media 'war' Conservatives buck Trump over worries of 'socialist' drug pricing Criminal justice reform should extend to student financial aid MORE (R-Utah), were the only two "no" votes. Four Democratic senators who are running for president did not vote.

The Senate is also expected to vote on updates to tax treaties with Switzerland, Japan and Luxembourg on Wednesday.

Why they are important: The U.S. has bilateral tax treaties with other countries in order to prevent taxpayers' income from being doubly taxed by the two countries, and to ensure that taxpayers aren't avoiding taxes.

Breakthrough: The treaty agreements have been pending for a number of years and have been approved by the Senate Foreign Relations Committee on multiple occasions. But they had been held up because Paul has expressed concerns that information-sharing provisions would weaken taxpayers' privacy rights. But Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellAre Democrats turning Trump-like? House Democrat calls for gun control: Cities can ban plastic straws but 'we can't ban assault weapons?' Churches are arming and training congregants in response to mass shootings: report MORE (R-Ky.) saw an opening to give them floor time.

The Hill's Naomi Jagoda has more on the vote and what's next.

 

GOOD TO KNOW

  • "BB&T Corporation, SunTrust Banks, Inc. (NYSE:STI) and the National Community Reinvestment Coalition (NCRC) today announced the creation of a three-year, $60 billion community benefits plan for the region served by Truist Financial Corporation, the combined company to be created through the proposed merger of the two banks."
  • International Monetary Fund (IMF) managing director Christine Lagarde announced Tuesday she will resign from the global lender effective September 12, ahead of her likely confirmation as the next president of the European Central Bank. 
  • The liberal Center for American Progress (CAP) issued a report Tuesday arguing that Republicans' paid leave proposals are too narrow because they only provide paid leave to new parents.

 

ODDS AND ENDS

  • A roughly $5 billion reported settlement between Facebook and the Federal Trade Commission (FTC) to close an investigation into the Cambridge Analytica data scandal is angering Democrats and tech industry critics who see it as a weak punishment.