Information & Ethics Committee on May 29th, 2019

[Mark Ryland]

No, I don't agree with it.

[Raj Saini, Liberal, Kitchener Centre, ON]

You don't? Who's bigger than you?

[Mark Ryland]

There's a huge market in book sales from all kinds of retailers, from Walmart to—

[Raj Saini, Liberal, Kitchener Centre, ON]

Who sells more books than you?

[Mark Ryland]

I don't know the answer to that, but I'd be happy to look it up for you.

[Raj Saini, Liberal, Kitchener Centre, ON]

Okay.

One of the approaches you use when you allow books to be sold—I read this somewhere, so correct me if I'm wrong—is that you approach small booksellers and you exact a sizable fee from them to list their books. You don't pay authors per copy when they download the book, but you pay per page. If they don't finish the book, then you pocket the difference. You track online what people read. If people are reading popular authors, you don't provide a discount to them, because you know they will buy the book anyway.

Do you think this is fair, or is what I'm saying wrong?

[Mark Ryland]

I don't know the facts surrounding the questions you just raised, so I can't really answer. I would be happy to get back to you on that.

[Raj Saini, Liberal, Kitchener Centre, ON]

Okay.

This is my final question. Let's suspend animation for a second and look at Amazon as a mall. You own the mall. You grant space to other retailers. You allow them to be on your platform. You control access to customers and you collect data on every site. You're operating the largest mall in the world.

In some cases, whenever small retailers show some success, you tend to use that information to diminish competition. Since you have access to all the third party people who are selling products on your site, do you think that's fair?

[Mark Ryland]

We don't use the data we acquire for supporting our third party seller marketplace. We don't use that data for purposes of our own retail business or for purposes of product lines that we launch.

[Raj Saini, Liberal, Kitchener Centre, ON]

You're sure about that.

[Mark Ryland]

Yes.

[Raj Saini, Liberal, Kitchener Centre, ON]

You're saying that if anybody lists a product on your website, you do not track the sales of that product to know which product is popular and which product is not popular.

[Mark Ryland]

We track the data for supporting that business and the customers of that business. We don't use that data in our retail business.

[Raj Saini, Liberal, Kitchener Centre, ON]

You won't see which product is selling more or selling less and try to compete with that in any way.

[Mark Ryland]

In terms of the part of our business that supports this vast third party marketplace, which has enabled great success for thousands of companies and mom-and-pop shops around the globe, absolutely that part of our business uses the data to maximize the success of the marketplace. It's not used in our retail business.

[Raj Saini, Liberal, Kitchener Centre, ON]

One of the complaints in the area of innovation is that a number of market players are dominant because of the access to data they have and because of their ability to retain and use that data. In many cases, smaller companies or smaller players don't have access to the data, don't have access to the market. More importantly, in some cases, when emerging companies are on the rise, the larger companies will buy the technology to kill the technology so it does not compete.

Is that something Amazon or Apple or Microsoft is involved in, in any way?

[Mark Ryland]

If you look at our history of acquisitions, they tend to be very small and very targeted, so in general, the answer would be no.

[Erik Neuenschwander]

I believe that's also the answer for Apple.

[Raj Saini, Liberal, Kitchener Centre, ON]

I mean any emerging technology, any company that's emerging that might be a competitor to any of your platforms. You don't engage in that, or you just...? I don't get what you mean.

[Erik Neuenschwander]

The acquisitions that I'm familiar with have been companies like, say, AuthenTec, which was a firm whose technology we used to build the first version of touch ID into our phones. We look for technological innovations that we can integrate into our products, but I don't really see that as a fingerprint sensor company directly competing with Apple.

[John Weigelt]

We're actively involved with the start-up community around the world. Programs like BizSpark and Microsoft Ventures help our partners and start-ups really get their legs under them so that they can sell their product. We are a commodity software provider—we provide a common platform that helps communities around the world—so there will be areas that are innovated on top of our platform. We saw one such platform here built out of Montreal, Privacy Analytics, which was a start-up here that was doing perfect forward privacy. That was a technology that we didn't have that we thought would help catalyze our business, and as a result we acquired the company with the goal of building that into our products.

We make a decision about whether we build or buy based on the resources that we have, and in some cases there's great innovation out there that we acquire and build into our toolset. That's really how we look at that acquisition strategy.

[Raj Saini, Liberal, Kitchener Centre, ON]

Thank you.

[The Chair, Conservative, Bob Zimmer]

Thank you, Mr. Saini.

Last up will be Mr. Baylis.

What's going to happen is Mr. Baylis will finish, and then we're going to start the rounds all over again. Delegations will all start from the top again, just to be clear.

Mr. Baylis, go ahead for five minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you, Chair.

Thank you to the witnesses. You're both very knowledgeable and very open and willing to answer questions, which was not exactly what we had yesterday, so I'm very grateful for that.

Mr. Davidson, in your opening remarks you mentioned that Google and Facebook have an opportunity to improve their transparency. Could you expand a bit on that, please?

[Alan Davidson]

Sure.

We do think that ad transparency is a major tool to think about in how we fight disinformation protection, particularly in the election context. We've been working with some of the other big players as part of this EU code of practice, to try to get better transparency tools out there for consumers to see what ads they're seeing and for researchers and for journalists to understand how these big disinformation campaigns happen. We have a fellow at the Mozilla Foundation working on this. The big frustration, honestly, is that it's very hard to get access to these archives of ads, even though some of our colleagues have pledged to make that access available.

We recently did an analysis. There are five different criteria that experts have identified—for example, is it historical? Is it publicly available? Is it hard to get the information? It's those kinds of things.

We put out a blog post, for example, that Facebook had only met two of the five criteria, the minimum criteria that experts had set for reasonable access to an ad archive. Not to pick on them—we've already picked on them publicly—but I'll say we hope we can do more, because I think without that kind of transparency....

Google did better. It got four out of five on the experts' chart, but without more transparency around ads, we're really stuck in trying to understand what kinds of disinformation campaigns are being built out there.