Big Tech, look out: the American Innovation and Choice Online Act may actually be close to passing.
The Senate version of the bill (S. 2992) was sponsored by Senate Judiciary Committee Antitrust Subcommittee Chair Sen. Amy Klobuchar (D-MN) and full committee Ranking Member Sen. Chuck Grassley (R-IA) and co-sponsored by Sens. Dick Durbin (D-IL), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Mazie Hirono (D-HI), Mark Warner (D-VA), Josh Hawley (R-MO), John Kennedy (R-LA), Lindsey Graham (R-SC), Cynthia Lummis (R-WY), and Steve Daines (R-MT). This heady group of bipartisan lawmakers speaks to the bill’s popularity in Capitol Hill.
A companion version (H.R. 3816) is also being considered in the House.
So far the bill has passed the Senate Judiciary Committee and is now waiting for a vote by the full Senate. Supporters think that with any luck the bill could arrive on the President’s desk by summer.
The bill, according to a press release issued by Louisiana Sen. John Kennedy, would “prohibit dominant platforms from abusing their gatekeeper power by favoring their own products or services, disadvantaging rivals or discriminating among businesses that use their platforms in a way that harms competition on the platform.”
It would also prohibit specific forms of conduct that are harmful to small businesses, entrepreneurs, and consumers, but that do not have any pro-competitive benefit, including:
- Preventing another business’s product or service from interoperating with the dominant platform or another business;
- Requiring a business to buy a dominant platform’s goods or services for preferred placement on its platform;
- Misusing a business’s data to compete against it; and
- Biasing search results in favor of the dominant firm.
Tech giants say the bill would be a disaster for the American consumer, claiming that it would ruin Google search results, bar Apple from offering useful features on iPhones, force Facebook to stop moderating content, and even outlaw Amazon Prime.
No Amazon Prime? Say it ain’t so! Well, it may not actually happen. But according to Big Tech, the problem is that third party sellers rely on Amazon’s marketplace to reach customers. For those sellers to qualify for Prime shipping, they have to use FBA (Fulfillment by Amazon) to tap into Amazon Prime two-day delivery.
And FBA isn’t free. Third party sellers have to pay for it. The Senate bill would prohibit a company making “preferred status or placement on the covered platform” dependent “on the purchase or use of other products or services.”
Adam Kovacevich, lobbyist for several Big Tech companies, argues that the bill would kill Prime, because you can’t have Prime without FBA.
The U.S. Chamber of Commerce has also opposed the bill. In a letter sent to the Senate Judiciary Committee, the Chamber warned that the American Innovation and Choice Online Act charts a dangerous new course for antitrust by singling out specific companies instead of focusing on conduct, as in current law. The Chamber noted that “the outcome of such radical change to antitrust would drive inflation, hamper innovation, undermine job creation, and damage American’s global competitiveness.”
Does the American Innovation and Choice Online Act support an open market and fair competition, as its authors insist? Or is it just more government intrusion on a system that has already proven itself to be innovative and, well, really good at getting Americans to spend money. Time will tell.