The Ending Platform Monopolies Act targets Big Tech

On June 11, a package of new bills introduced in the House antitrust subcommittee aims at Big Tech, specifically Amazon, Facebook, Google, and Apple. One of those bills, H.R. 3825, the Ending Platform Monopolies Act, introduced by Democratic Rep. Pramila Jayapal of Washington, could have the effect of splitting companies into two entities or do away with their private label products.

Democrats and Republicans have criticized the influence of Big Tech going back to the 2016 election. Democrats have primarily focused on the money tech platforms make and what they see as a lack of doing more to prevent the spread of "misinformation." Republicans, meanwhile, have mainly focused on Big Tech's alleged censorship of conservatives and its alignment with "woke" politics. For example, in April, 100 corporate leaders took part in a call to discuss responding to new state election laws. JD Vance, the author of Hillbilly Elegy and a possible Senate candidate in Ohio, tweeted, "Raise their taxes and do whatever else is necessary to fight these goons. We can have an American Republic or a global oligarchy, and it's time for choosing."

Unlike other legislation that critics say is built around messaging, the Ending Platform Monopolies Act has initial bipartisan support. The legislation has 11 co-sponsors, four of whom are Republicans, including Rep. Ken Buck of Colorado, Rep. Lance Gooden of Texas, and Rep. Madison Cawthorn of North Carolina.

In a tweet announcing the introduction, Gooden said, "Americans suffer because a few Big Tech oligarchs control ENTIRE parts of the internet. I intro'd the Ending Platform Monopolies Act w/ @RepKenBuck and @RepJayapal to REIN IN BIG TECH."

The legislation has a narrow focus, centered on companies with market capitalizations of more than $600 billion and that have more than 50 million active monthly users or 100,000 or more monthly active business users.

That raises possible legal questions because only a select few companies fall into that category. However, Wayne T. Brough, the policy director for technology and innovation at the R Street Institute, a public policy research organization, is skeptical of a legal challenge.

"It was written in a way that a covered platform targets the Big Tech companies while letting other large online platforms such as Walmart off the hook," Brough said in an email to the Washington Examiner. "But technically, the standards are industry-wide standards, so I don't know if a legal challenge would be possible."

The possible impact of the legislation might sound like a good idea to those concerned about Big Tech's overreach. However, the implication for consumers could be costly, especially with the possibility of Amazon or Apple having to spin off any business sectors.

"Consumers would pay the price of such an approach. For example, forcing Amazon to spin off Amazon Basics and other generic brands is obviously designed to help other sellers, but that's because Amazon is able to offer consumers lower prices," said Patrick Hedger, vice president of policy at the Taxpayers Protection Alliance.

Hedger added, "The last thing Americans need coming out of a pandemic and faced with surging inflation is being forced to pay more for basic goods. Companies have competed with the generics brands of brick-and-mortar retailers for generations, and there's no justification for banning Amazon from doing the same thing, especially in the name of 'competition.'"

A graphic from the Taxpayers Protection Alliance reveals just some possible complications arising from the Ending Platform Monopolies Act. For example, the law would ban Amazon from selling its more economical Amazon Basics product line while allowing offline competitors to do so. Another example is outlawing Apple from pre-installing apps such as iMovie and Apple's Safari web browser on iOS and Mac devices.

Brough also agrees the law would be a detriment to consumers.

"This legislation is more about targeting these specific companies. Prices are low (and often zero [Google and Facebook]) right now, and consumer choice is expanding — clearly not signs of monopoly harms," he said. "The legislation would mark an important shift from consumer protection as the underlying basis of antitrust to a system protecting specific firms who are finding it difficult to compete in the marketplace. In the long run, that is a negative for consumers."

It raises the question: Who benefits from the legislation? Perhaps other companies? Particularly those who have taken a publicly vocal stance? Spotify, which competes directly with Apple in the music streaming and podcast realm, joined with other companies last fall to create the Coalition for App Fairness. The coalition website says of the organization, "Every day, Apple taxes consumers and crushes innovation. The Coalition for App Fairness is an independent nonprofit organization founded by industry-leading companies to advocate for freedom of choice and fair competition across the app ecosystem."

But Hedger says that freedom of choice shouldn't get decided by the government: "These bills seek to turn our understanding of competition law on its head, protecting would-be competitors rather than competition itself. The fact that there are winners and losers in the marketplace is a feature, not a flaw in need of fixing."

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Tags: Technology, Business, Congress, Big Tech, Legislation, Amazon, Apple, Consumer Regulation

Original Author: Jay Caruso

Original Location: The Ending Platform Monopolies Act targets Big Tech