If you want to tell how worried an industry is about a piece of pending legislation, a decent indicator is how apocalyptic its predictions are about what the bill will do. By that standard, Big Tech is deeply troubled by the American Innovation and Online Choice Act.
The misnamed bill is designed to prevent dominant online platforms — such as Apple and Facebook and especially Google and Amazon — from giving themselves an edge over other businesses that must go through them to reach customers. With one of the two antitrust bills voted out of committee on a heavily bipartisan vote (the other would regulate app stores), this may be the best, if not the only, attempt this Congress has made to stop the biggest tech companies from abusing their status of a guard.
“That’s the ball game,” says Luther Lowe, Yelp’s senior vice president of policy and a longtime Google antagonist. “That’s how these guys stay big and relevant. If they can’t put their hand on the scale, then that leaves them vulnerable to small and medium-sized companies eating into their market share.”
But according to the tech giants and their lobbyists and front groups, the bill, which was introduced by Amy Klobuchar and Chuck Grassley, the top Democrat and Republican respectively on the Senate Judiciary Committee, would be a disaster for the American consumer. In the ongoing advertising push against it, they claim it will ruin Google search results, prevent Apple from offering useful iPhone features, force Facebook to stop moderating content, and even ban Amazon Prime. It’s all quite worrying. Is any of this true?
The basic idea of the legislation is that a company that controls a market should not be able to set special rules for itself within that market, because competitors who object have no realistic place to go. No business can afford to be left out of Google’s search index, and few online retailers can make a living without being listed on Amazon. So the Klobuchar-Grassley bill, broadly speaking, prohibits self-preference from platforms that reach certain size thresholds, such as monthly active users or annual revenue. To take a simple example, this would mean that Amazon cannot favor its own branded products over other brands when someone shops on its site, and Google cannot choose to link to YouTube when someone searches for a video except if these connections are not objectively the most appropriate.
It’s also hard to say exactly what the law would do because it leaves a lot unspecified. Like many federal laws, it directs an administrative agency—in this case, the Federal Trade Commission—to translate general provisions into specific rules. And it gives the FTC, the Department of Justice and attorneys general the power to sue companies for violating those rules. (Last week, the Justice Department approved the bill, an important signal of support from the Biden administration.) Inevitably, both the rules and any enforcement actions will end up being challenged in court, giving federal judges the final say on exactly what the law means. .
