For American consumers and big tech, the war against them continues. Earlier this week, a bipartisan group of U.S. Senators, led by Amy Klobuchar (D-MN), introduced the American Innovation and Choice Online Act (AICOA) that would significantly change America's antitrust laws in a way that would profoundly harm consumers.
AICOA's proponents claim the bill would "restore competition online by establishing common sense rules for dominant digital platforms to prevent them from abusing their market power to harm competition, online businesses, and consumers." Not considered, however, is the genuine damage the bill's provisions could have for consumers and big tech and how it codifies the reflexive and rigid big is bad mentality into U.S. competition law.
Similar legislation is also being considered in the Democratic-controlled House of Representatives, further increasing the bill's possibility of becoming law.
If AICOA becomes law, the bill will create a category of "covered platforms" if the tech platform has 50 million "United States-based monthly active users" or "100,000 United States-based monthly active business users." Additionally, a company would be classified as a "covered platform" if owned by an individual "with United States net annual sales or a market capitalization greater" than $550 billion.
This designation would apply for seven years. After this period, a platform can apply to have the "covered platform" designation removed, however, this will be at federal regulators' digression.
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The definition of a covered platform that only covers online platforms means the bill's provisions would specifically target a few tech companies, including Google, Amazon, Apple, Facebook, and Microsoft. The narrow scope of AICOA suggests lawmakers have a specific interest in targeting big tech.
If passed, a small number of companies designated "covered platforms" would be prohibited from self-preferencing their own products over other businesses. A ban on self-preferencing products would be particularly harmful to consumers, making it harder for them to find cheaper alternatives. Amazon, for example, would be banned from advertising a lower-priced iPhone charger over more expensive alternatives. This prohibition would see consumers paying more for products.
The provisions of AICOA would also require tech platforms to allow consumers to remove preinstalled apps. For example, each Apple and Google device comes pre-loaded with several free apps, such as Apple News or Google Maps. The bill would force these manufacturers to make it easier for consumers to delete these apps from their devices. However, this stipulation offers few benefits to consumers as it's unlikely that an android user would delete Google Maps for an inferior product that is not provided free of charge.
The bill could also have profound ramifications for cybersecurity and data privacy. Under the provisions outlined in AICOA, covered platforms could not "materially restrict or impede a business user from accessing data generated on the covered platform." This would mean large tech companies would have to share data with smaller businesses. Unfortunately, many small businesses don't have the sophisticated cybersecurity and data privacy protections offered by big tech platforms meaning cybercriminals and hackers have more opportunities to exploit these vulnerabilities. The net result could be sensitive consumer data left unnecessarily vulnerable to criminals and data breaches become a common, but avoidable, occurrence.
The bill stipulations would also harm smaller businesses that depend on the open access to online marketplaces offered by big tech. Amazon, for example, has over 500,000 small businesses on its marketplace, while Google Pay has over 724,000 active app developers.
Rather than complying with AICOA's provisions, it is entirely possible that tech platforms remove competitors rather than face the "covered platform" designation. This de-platforming would force small businesses to create their own platforms that are more expensive and would reach fewer consumers. This would inevitably negatively impact the profitability of smaller businesses and prevent them from providing consumers with new and innovative products.
When it comes to antitrust and competition law, lawmakers seem vogue to push for a more punitive and hostile regulatory environment. While this may seem politically popular, given the broad public and bipartisan support for such measures, they ignore the reality that consumers and small businesses will be left paying the price.
For the sake of consumers and small businesses, Washington should abandon its pointless and harmful war on big tech.
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