WASHINGTON (SBG) — A bipartisan group of senators took the next step in seeking to rein in Big Tech with new antitrust legislation to prevent the biggest internet platforms from favoring their services over competitors.
Sens. Amy Klobuchar, D-Minn. and Chuck Grassley, R-Iowa, are the lead sponsors on the American Innovation and Choice Online Act, which takes aim at companies like Amazon, Apple, Google and Facebook, who have been accused of using their market power to stifle competition. The House introduced a similar bill earlier this year.
The legislation was introduced Monday amid reports that the e-commerce giant Amazon routinely favors its house brands above non-Amazon competitors, even when the competing products have more sales, higher customer ratings and more reviews. Amazon was also hit with fresh allegations that it repeatedly used the data it collected from third-party vendors to create knock-off versions of their most successful products.
Google has long been accused of manipulating search rankings to promote its products and services. Apple has been sued for an alleged App Store "monopoly" and criticized for preinstalling its apps on iPhones. Each company has denied engaging in inappropriate self-preferencing.
Klobuchar described the antitrust rules as a way for America to deal with its "monopoly problem" and restore open markets and fair competition in a sector dominated by a small handful of companies.
Illinois Sen. Dick Durbin, chair of the Senate Judiciary Committee, said the regulations would "fight strong arm tactics used by Big Tech to disadvantage their consumers and exclude competitors from the marketplace."
Grassley insisted the new rules would "create a more even playing field" to enable smaller companies to compete with the Big Tech giants.
Under the proposed legislation, companies would be barred from biasing search results in favor of their products. Tech firms would not be allowed to use competitors' data to compete against them and they could not require a business to buy their goods or services to secure preferred placement. The bill would also make it illegal to prevent a third party from interoperating with the dominant platform in a way that's unequal to that party's products.
Tech companies pushed back, warning that the government intervention would cause more harm than good.
Amazon vice president of public policy, Brian Huseman, issued a statement saying the bill "would jeopardize Amazon’s ability to operate a marketplace for sellers, and it would significantly degrade the benefits of Amazon Prime that customers love."
Matt Schruers, president of the Computer & Communications Industry Association, argued that, rather than spurring competition, the regulations would "hamstring" big companies and hinder innovation.
"It would dramatically rewrite the rules of the market for a handful of leading companies, putting regulators in charge of how leading digital products are designed," Schruers wrote in an opinion piece for The Hill. "This is unwise. Technology innovation responds to markets, not ministries."
Critics have also claimed that the legislation would make products and platforms more inconvenient for users. Google could be forced to stop showing Google Maps results in searches on its platform. Apple could be restricted from preloading FaceTime and the App Store onto iPhones and Amazon users could have to take an extra step to find Amazon-preferenced products that qualify for same-day delivery.
There are also concerns that the antitrust law would penalize companies based on size, rather than their business practices or harm to consumers, which have been the gold standard in prosecuting antitrust cases. The American Innovation and Choice Online Act only targets "dominant platforms" with at least 50 million monthly active users in the U.S., 100,000 business users or a market capitalization above $550 billion. Smaller competitors are omitted from the regulations.
The bill is one of many under consideration by Congress. Lawmakers are looking at data privacy legislation, online protections for children, algorithm transparency and a host of antitrust laws. Some are hopeful that their efforts to rein in Big Tech will be buoyed by recent high-profile hearings with a Facebook whistleblower who claimed the company had knowingly misled the public about the harms caused by its products.
Tech companies have responded to the legislative push with a lobbying onslaught on Capitol Hill. According to OpenSecrets, Amazon spent $10.2 million on lobbying operations in the first half of the year and Facebook spent $9.6 million, putting them in the top two spots for business lobbyists.