As promised, Senator Amy Klobuchar (D-MN) has announced the forthcoming introduction of companion legislation to Rep. David Cicilline’s (D-RI) “American Choice and Innovation Online Act,” a package of antitrust broadsides aimed at a selection of the largest U.S. tech companies. The bill declares a number of common business practices to be “unlawful conduct” subject to antitrust enforcement, carefully targeted at selected “Big Tech” companies over a market capitalization of reportedly $550 billion.
The results of this bill becoming law would be disastrous not only to the targeted companies (Google, Apple, Facebook, Amazon, and possibly Microsoft), but also to consumers and small sellers across the digital economy. Among the most recognizable products and services that could be found illegal under Klobuchar's bill are:
Favored search results such as Google Maps, Facebook Marketplace, or Amazon Featured Seller recommendations,
Preloaded Google or Apple apps on smartphones,
Amazon Basic products and Amazon Prime shipping from being offered on Amazon.com.
The bill also forces the “covered platforms” to offer data interoperability, raising major privacy and security concerns, and would potentially punish them for efforts to keep malicious products and services out of their app stores.
Disappointingly, this sweeping progressive intrusion into digital markets is reported to boast a number of Republican co-sponsors, including the two most senior Republicans on the Senate Judiciary Committee, Senators Chuck Grassley (R-IA) and Lindsey Graham (R-SC). This bill is a repudiation of basic limits on government interference in free markets that were once a hallmark of Republican — and even bipartisan — policy.
These proposed restrictions entirely disregard the consumer welfare standard that has guided antitrust enforcement for over four decades. The services and products that could be effectively eliminated by Klobuchar's proposal are overwhelmingly popular because they provide convenience and value to consumers. How do Americans benefit from the destruction of Amazon’s Prime shipping, or by forcing Google and Apple to allow potentially malicious actors to sell through their app stores? How is consumer welfare furthered by preventing discounted products and ads that could save customers money from being featured in their search results?
The authors of this bill are so desperate to tear down the leading digital platforms that they ignore the fact that many of the practices it bans are what makes it profitable to build and invest in their services in the first place. Targeted ads, sponsored search results, the app stores, and Amazon’s sales platform themselves are services that enable vast amounts of smaller, 3rd-party sellers to operate, find customers, and profit. What is the incentive for Google or Amazon or Apple to innovate and continue building upon these platforms that have benefited billions of users if they are to be punished for finding ways to profit by making them more convenient to use?
As Chamber of Progress President Adam Kovacevich correctly notes, this bill also disadvantages America’s (and, indeed, the world’s) leading tech companies against foreign competitors by subjecting them to restrictions that won’t affect competing companies such as Alibaba, Tencent, or Samsung. Making it illegal to resist interoperability could even force U.S. companies to provide these foreign competitors sensitive data on their users without their consent.
Ultimately, like its House equivalent, this new bill aims to punish Big Tech for the very services and innovations that made them successful, and in so doing punishes all of the millions of consumers and small businesses who enjoy and benefit from their success. Competitors — foreign and domestic — may appreciate Republicans handing this government hammer to progressive antitrust enforcers, but Americans would be left with less money, convenience, and security as a result.