Senate Judiciary Committee Advances Antitrust Bill Aimed At Limiting Power Of Amazon, Apple And Other Big Tech Platforms

Ted Johnson
·4 min read
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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 a bipartisan desire to curb the influence of major internet companies.

The bill, the American Innovation and Choice Online Act, is aimed at 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.

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The 16-6 vote faces uncertain prospects, as lawmakers put off votes on dozens of amendments that could substantially change the bill if and when it gets to the Senate floor for a final vote. But the bill also is the focus of fierce lobbying against it, with Apple CEO Tim Cook himself calling lawmakers and platforms mounting advertising campaigns to drum up public opposition.

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 focused on the increasing influence of big tech, calling in CEOs to hearings, conducting investigations and issuing dire warnings. “At least this is a start,” Sen. John Kennedy (R-LA), said before Thursday’s vote. “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.

“We have to look at [these companies] differently than just startup companies in a garage. That is not what they are anymore,” Klobuchar said, adding that “at some point we have to have rules of the road to make things fair.”

“This will ensure there is robust competition on dominant tech platforms,” Grassley said. “…The goal is to prevent conduct that stifles competition.”

Tech companies have warned of the legislation’s unintended consequences. 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.

A number of lawmakers on the committee also expressed concerns and major misgivings to the legislation as written. A particularly tense exchange at the markup came when Klobuchar defended the legislation as Sen. Dianne Feinstein (D-CA) warned that it would create “two separate legal standards.”

“It is specially designed to target the small number of specific companies, most of which are headquartered in my small state of California,” Feinstein said.

Klobuchar took issue with Feinstein’s remark that federal agencies also have concerns with some of the provisions.

“That is a pretty bold statement,” Klobuchar said.

“I have been told that,” Feinstein said.

“By who?” Klobuchar said.

“You may not like it,” Feinstein answered.

“I don’t like it at all because I think that it is not true,” Klobuchar said.

Feinstein and California’s other senator, Alex Padilla, ended up voting for the bill, even though they each express reservations about it.

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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