Evidence of meeting #155 for Access to Information, Privacy and Ethics in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was apple.
A video is available from Parliament.
Manager of User Privacy, Apple Inc.
When it comes to antitrust regulations, I'm working with an engineering organization, so I can't say I've given a lot of thought to the regulation side. I would be happy to take any questions and refer them back to our legal or government affairs teams.
Member, Digital, Culture, Media and Sport Committee, United Kingdom House of Commons
As a consumer, do you think that large global tech giants have too much market influence and power?
Manager of User Privacy, Apple Inc.
My focus, in terms of our platforms, is to put the user in control of data and to leave as much control as possible in the hands of users.
Director, Security Engineering, Office of the Chief Information Security Officer for Amazon Web Services, Amazon.com
We're a relatively large company, but of course, that is largely the result of the fact that we operate globally. We operate in a lot of different markets. In any given market segment, we typically can be often a very small or middle-size player.
Again, I'm not going to opine in any depth about competition laws. It's not my area of expertise, but we feel the existing competition law as it exists today is adequate to deal with technology companies.
Member, Digital, Culture, Media and Sport Committee, United Kingdom House of Commons
How about you, John?
National Technology Officer, Microsoft Canada Inc.
We've been around for quite some time, since the 1970s, so we've had some focus on the organization and the way we do our business. I think we've made appropriate adjustments, which we made based on the input and the perspective of governments around the world.
One thing that is important to me as a Canadian working for Microsoft here in Canada is the partner ecosystem and the enabling of Canadian innovation and Canadian business. Over 12,000 partners who make a living off of the toolset have the reach from a consistent platform to be able to sell innovation around the world based upon these toolsets and have a multiplying factor for the revenue that they generate here in the nation.
Sometimes with packaged software it's an eight-to-one multiplier. For cloud computing, it's estimated to be as high as a 20-to-one multiplier for the use of these toolsets, so we see that as a great economic enabler. Having that global reach is an important factor for the partners we work with.
Member, Digital, Culture, Media and Sport Committee, United Kingdom House of Commons
That quite neatly leads me on to my next question. I think there is quite a strong argument that global tech giants are a bit like a public utility and should be treated as such because of the power you wield.
Bearing in mind what you said just now about innovation, do you think that if that was the case and there was a bigger antitrust emphasis, it would negatively impact innovation? Is that your main reason?
National Technology Officer, Microsoft Canada Inc.
I was making a linkage between those themes. My sense was that, look, we democratize technology. We make it silly simple for emerging nations and emerging companies with great ideas to leverage very advanced technology. When you think about artificial intelligence and the work that's happening in Montreal, Toronto, and even globally, the ability to make use of these tools to provide a new market is critically important.
I see this as a catalyst for the innovation community. We're working across the five Canadian superclusters, which is Canada's innovation engine around agriculture, oceans and advanced manufacturing, to build out new toolsets. Our ability to look across those communities and do cross-platform types of approaches and leverage our experience on a platform provides for activities in the community's best interest.
For example, in the ocean supercluster, working with data and having data about our oceans and having that sharing of a common commodity across the community is something we advocate to help that community grow . Having that platform and easy access to it provides that innovation.
Member, Digital, Culture, Media and Sport Committee, United Kingdom House of Commons
Would either of you like to comment on the innovation point from your company's perspective?
Director, Security Engineering, Office of the Chief Information Security Officer for Amazon Web Services, Amazon.com
Yes, I would be happy to.
We face robust competition in all the markets we operate in. Cloud computing is a great example. There are not a large number of players in the cloud market, but competition is very strong, prices are dropping, and it enables, as my colleague was saying, new kinds of business models that were really previously impossible.
I worked for some years in our public sector business at Amazon Web Services. What I saw there was that we had very small companies, 10-, 20- or 30-person companies, competing for large government contracts that would have been impossible for them to compete for prior to the existence of cloud computing. It would have required a very large, dedicated government contractor to compete for these large contracts because they required so much infrastructure and so much capital investment in order to go after a large contract.
With the ability to get onto many IT services from cloud, you now have this great democratization, to reuse that word, of international market access, of mom-and-pop shops with international market access, whether through Amazon sellers on our retail site or through using our cloud platform. I think competition is really strengthened because some of these large-scale players enable people to access a broader set of markets.
Member, Digital, Culture, Media and Sport Committee, United Kingdom House of Commons
But they have to do it through you, don't they? Where else would they go?
Director, Security Engineering, Office of the Chief Information Security Officer for Amazon Web Services, Amazon.com
No, you can do it through us or our competitors.
Member, Digital, Culture, Media and Sport Committee, United Kingdom House of Commons
But there aren't that many competitors, are there?
Director, Security Engineering, Office of the Chief Information Security Officer for Amazon Web Services, Amazon.com
There are not a huge number of competitors, but the competition is fierce.
Member, Digital, Culture, Media and Sport Committee, United Kingdom House of Commons
It sounds a bit odd to me that you have very few competitors, yet it's fierce. That's not what I'd normally assume to be the case.
How about you, Erik?
Manager of User Privacy, Apple Inc.
From what little I know about legislation, it appears to be very challenging to write. I would presume that a goal of any legislation would be not to limit innovation, not to put a ceiling on what companies can do, but instead to try to put a floor for good behaviours.
Member, Digital, Culture, Media and Sport Committee, United Kingdom House of Commons
Okay, thank you.
Conservative
Liberal
Raj Saini Liberal Kitchener Centre, ON
Good morning, everybody.
I'm sure you're all aware of the term “data-opoly”. Right now, in front of us, we have Apple, which controls a popular mobile operating software system. We have Amazon, which controls the largest online merchant platform software. We also have Microsoft, which has the ability to acquire a lot of data and use it to gain market advantage.
In talking about competition, I want to go beyond what Ms. Stevens said. When we look at the European Union right now, we see that Apple violated European state aid rules when Ireland granted undue tax benefits of 13 billion euros. In some cases, you paid substantially less tax, which was an advantage.
In the case of Amazon, the European Commission targeted Amazon's anti-competitive most favoured nation clause, and Luxembourg gave Amazon illegal tax benefits worth some 250 million euros.
My point is not in any way to embarrass you, but obviously there is a problem with competition. The problem stems from the fact that there are different competitive regimes or competition laws, whether it be in Europe, whether it be the FTC, or whether it be Canada. In European competition law, a special duty is imposed on dominant market players. That is not the same as the United States, because the same infractions were not charged in the United States. Do you think it's something that should be considered because of your dominant market status?
Director, Security Engineering, Office of the Chief Information Security Officer for Amazon Web Services, Amazon.com
As I said, I'm not an expert on competition law. We certainly obey the laws of the countries and regions in which we operate, and we will continue to do so.
Liberal
Raj Saini Liberal Kitchener Centre, ON
Well, the European Commission fined Amazon, so you didn't really follow the law.
My question is about the special duty imposed in European competition law on dominant market players. Do you think that should come to the United States and Canada also?
Director, Security Engineering, Office of the Chief Information Security Officer for Amazon Web Services, Amazon.com
I really should get back to you on that. I'm not an expert in that area. I'd be happy to follow up with our experts in that area.
Manager of User Privacy, Apple Inc.
I am aware that the state aid story made a great deal of press, I think, but I'm really aware of it as a consumer of the news. I haven't done a lot of reading on European competition law. Similarly, as I'm focused on privacy by design from the engineering side, for questions on that I'll have to get the company to get back to you.
Liberal
Raj Saini Liberal Kitchener Centre, ON
Okay.
Amazon is probably the most dominant bookseller in the market. Do you agree with that?
