Big Tech Panics Over New Proposed U.S. Legislation

A new bill before the U.S. Senate targeting large technology companies, the American Innovation and Choice Online Act, is a rare bipartisan effort to rein in big tech for possible antitrust and consumer rights violations.

The bill, led by Reps. Amy Klobuchar (D) and Chuck Grassley (R), aims to prevent large technology companies from taking unfair advantage of other companies that use their platforms to reach customers.

Supporters believe the proposed law is the Biden administration’s best bet to stop big technology companies like Google, Amazon, and Facebook from abusing their role as gatekeepers.

If enacted, the law will give the government, through the Federal Trade Commission, the Justice Department, and the Attorney General, the authority to effectively sanction big tech platforms for activities such as:

  • Unfair preference of own platform,
  • ‘Monopolistic practices’ that prevent others from competing fairly
  • Restricting business owners from using their own platform or systems when it comes to their own products and services
  • Use of “non-public data” derived from the provision of another company’s services or products to compete with that company

The provisions of the law would, for example, prevent Amazon from promoting its in-house branded products over other brands to online buyers. Google could no longer offer YouTube links when a user makes a video search without being sure that those links really present relevant content.

Essentially, provisions in the bill prohibit a company controlling an online marketplace from creating special rules for itself in that market, discriminating against competing companies and marginalizing their products and services.

Lobbyists and big tech companies opposed to the law have raised concerns that the law could potentially ruin Google search results, prevent Apple from offering useful features on iPhones, force Facebook to stop moderating content, and even ban Amazon Prime.

Adam Kovacevich, chief executive officer of the Chamber of Progress, a lobbying group funded by big tech companies, and a former Google executive for public policy, argues that this would kill Prime, because you can’t have Prime without Fulfillment by Amazon (FBA), which guarantees express shipping to Amazon customers. “The guarantee of one- or two-day shipping is sort of inextricably linked with having as much control over the shipping and fulfillment process as possible,” he says.

Supporters of the bill rushed to say that the law does not explicitly prohibit FBA. It merely states that Amazon cannot force sellers to pay for its fulfillment program to receive the Prime label. Instead, the online shopping giant would have to let third-party sellers choose their preferred logistics provider.

Moreover, if the law is enacted, the government can effectively sanction Google for its alleged practices of self-favoritism in its popular search engine. Ninety per cent of online searches are conducted through Google, and the tech giant is accused of using its platform to prioritize its own products and services.

Google argues that the Senate bill “could prohibit us from providing you with integrated, high-quality results – even if you prefer them – simply because another company could offer competing answers.

Experts in favour of the law say it will actually help Google display the most useful results, as originally intended by its algorithm. The online search giant could still show a carousel of restaurant reviews if a user searches for “pizza near me”, for example. However, it would now be obliged to give competitors like Yelp and Tripadvisor a fair chance to show their own results on the carousel.

Although the Senate Judiciary Committee has passed the bill, the American Innovation and Choice Online Act still has to pass the Congressional Judiciary Committee and the Senate; given its bipartisan support, its advocates are optimistic that the law has a good chance of going into effect.

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Jim Love, Chief Content Officer, IT World Canada

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