A major piece of legislation aimed at limiting the business conduct of Amazon and other tech platforms cleared the Senate Judiciary Committee on Thursday, underscoring the bipartisan desire to curb the influence of major internet companies.
The bill, the American Innovation and Choice Online Act, is aimed cracking down on a platform’s “self-preferencing.” It prohibits dominant internet companies like Amazon from favoring their own products and services in a way that would “materially harm” competition on their platform. It also would restrict conduct such as discriminating against businesses that use their platforms, and places limits on practices that disadvantage rivals.
The 16-6 vote faces uncertain prospects, as lawmakers put off votes on dozens of amendments that could substantially change the bill if an when it gets to the Senate floor for a final vote.
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A similar bill passed the House last year, along with five other antitrust bills. But that legislation has yet to make it to the floor for a vote, and it’s still unclear what the fate will be for the American Innovation and Choice Online Act.
Yet the mere advancement of the legislation out of committee was viewed as a significant step after nearly five years in which lawmakers have held hearings, given speeches and warned of the growing power of major platforms. “At least this is a start,” said Sen. John Kennedy (R-LA). “All we have done is strut around, issue press releases and do nothing.”
More legislation is coming. Another bill, the Open App Markets Act, would require that Apple and Google allow third party apps and app stores. Lawmakers have held hearings that have highlighted the business practices of the two companies, as third-party developers complained of demands for 30% of their earnings for the use of their stores.
When the American Innovation and Choice Online Act was introduced last October, it drew attention because it was authored by two prominent senators on the opposite side of the aisle: Sen. Amy Klobuchar (D-MN), who chairs the Senate Judiciary antitrust subcommittee, and Sen. Chuck Grassley (R-IA), the top Republican on the Judiciary Committee.
The bill is aimed not just at Amazon but Apple, Google, Facebook and perhaps Microsoft. It singles out platforms with at least 50 million monthly active users in the U.S. or at least 100,000 active business users, and has net annual sales or market capitalization greater than $550 billion. The platform also would have to be a “critical trading partner,” or offer products and services for sale.
“This will ensure there is robust competition on dominant tech platforms,” Grassley said. “…The goal is to prevent conduct that stifles competition.”
The legislation passed even with vigorous lobbying by tech companies against it. Earlier this week, Amazon’s vice president of public policy, argued that the legislation would “jeopardize our ability to allow small businesses to sell on Amazon.” He said that the bill would “make it difficult for us to guarantee one or two-day shipping for those small businesses’ products—key benefits of Amazon Prime for sellers and customers alike.”
“The bill’s authors are targeting common retail practices and, troublingly, appear to single out Amazon while giving preferential treatment to other large retailers that engage in the same practices,” Huseman said.
In her remarks, Klobuchar noted the efforts by tech giants to mobilize opposition against the bill, but praised lawmakers who have continued to still support it. “For the first time, monopoly power is going to be challenged,” she said.
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