Senate Bill Prevents Top Market Platforms From Favoring Their Own Offerings
A bipartisan group of senators led by Amy Klobuchar (D-MN) and Charles Grassley (R-IA) this week unveiled legislation to prohibit major digital platforms from favoring their own products and services over third-party offerings, a practice they say is inherently anticompetitive and harmful to small businesses and consumers.
When dominant tech companies exclude rivals & kill competition, it hurts small businesses and can increase costs for YOU. My new bipartisan legislation with @ChuckGrassley will establish new rules of the road to prevent large companies from boxing out their smaller competitors.
— Amy Klobuchar (@amyklobuchar) October 14, 2021
The bill, called the American Innovation and Choice Online Act, targets a narrowly defined group of tech companies: those with more than 50 million users or 100,000 businesses active on their platforms per month, market capitalizations or net annual sales higher than $550 billion, and “critical trading partner” status—which excludes all but a handful of digital market leaders such as Amazon, Apple, Facebook, and Google. (Innovation Policy News is a project of the Information Technology and Innovation Foundation, which receives financial support from those companies.)
These “covered platforms” would be restricted from using the data they generate about third-party products or services to develop their own competing versions. Covered platforms also would not be allowed to take advantage of search or ranking functionality to prioritize their own offerings over those of other businesses or competitors.
Industry representatives dispute the bill’s premise and argue it would undermine market platforms popular with consumers, like Amazon Prime and Apple’s App Store, while skewing competition in favor of domestic and foreign competitors that wouldn’t be subject to the same rules.
There's a new "myths/facts" handout that @SenAmyKlobuchar is sharing about her new “nondiscrimination” bill with @ChuckGrassley ⤵️ and I thought I’d break it down. 🧵:
— Adam Kovacevich (@adamkovac) October 19, 2021
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Platforms found to be in violation of the self-preferencing prohibitions would face civil penalties up to 15 percent of their annual domestic revenue.
The new regulations against self-preferencing would not apply if a platform can show its conduct does not harm competition or that complying with the rules would violate federal law or jeopardize user privacy.