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A major anti-Big Tech bill is heading to the floor of the Senate after a frustrating markup session in the Judiciary Committee. The American Innovation and Choice Online Act, as it’s called, majorly changes how online retailers can sell and promote their own branded wares and apps. It even bans Amazon and Google from suggesting their own products over those of a third party.
Supporters from both sides of the aisle are portraying the bill as a great leveler of sorts. They believe it helps consumers and the so-called “little guy” against the Big Tech companies.
“American prosperity was built on a foundation of open markets and fair competition, but right now our country faces a monopoly problem, and American consumers, workers, and businesses are paying the price,” Democratic Minnesota senator Amy Klobuchar said when the bill was announced last October.
“As dominant digital platforms — some of the biggest companies our world has ever seen — increasingly give preference to their own products and services, we must put policies in place to ensure small businesses and entrepreneurs still have the opportunity to succeed in the digital marketplace,” Klobuchar added.
Louisiana Republican senator John Kennedy went further in his praise of the bill. He suggested that it would help the free market by giving more options to online consumers at better prices. Iowa senator Chuck Grassley praised the proposal as a way to keep Amazon, Apple, and Google from discriminating against smaller companies.
This is not the case. The American Innovation and Choice Online Act would harm consumers and potentially prevent companies from removing malicious apps and products from their platforms. The bill also employs overly broad language that empowers government regulators to act on the whims of the White House in punishing violators.
Few would deny that online services like Amazon and Google have brought great benefit and convenience to customers. It makes no sense to target these companies simply for recommending their own apps and products over those of third parties.
The National Taxpayers Union Foundation has compared the bill to going into a grocery store and seeing store-brand items featured prominently against brand-name items. Users still have access to alternative products even if it takes a few extra seconds to find them. Retailers with a large brick-and-mortar and online presence, like Target, are excluded from the bill because they’re not large enough.
There are also concerns that consumers and small businesses might end up paying more or losing services they’d previously enjoyed. The Progressive Policy Institute notes that Amazon could end its two-day shipping under Prime, something the company itself warned of in its statement against the bill. (Klobuchar has vowed that Prime will continue under her proposal.) PPI also raised concerns that Apple and Google might start making everything a paid subscription service to avoid getting dinged by the government.
What’s most disturbing about this bill is its punishment: up to a 15 percent seizure of a company’s US revenue during the time that the violation occurred. This money doesn’t go to anyone who may have been affected by the violation, but straight into the Treasury. It’s just another way for the government to collect cash.
One problem with the legislation that hardly anyone has mentioned is that it may force bigger businesses to carry apps they don’t want associated with their brands. The bill’s language says companies can’t “unfairly limit the ability of another business user’s products, services, or lines of business to compete on the covered platform.” This could be interpreted as banning Google and Apple from keeping apps with software meant to steal private data from their app stores. Apps with content moderation worries could also avoid a ban. Larger companies could face litigation every time they refuse an app.
The American Innovation and Choice Online Act isn’t ready for a vote. The Judiciary Committee completely ignored its duties by marking up a half-baked bill instead of holding a hearing that featured testimony from both supporters and opponents. It seems this bill was put together to help incumbents prepare for a tough election cycle in the hope of convincing voters that they’re doing something.
