The measure that cleared the Senate would address issues raised by multiple investigations from The Markup
By: Aaron Sankin
Estimated reading time: 4 minutes
The Senate Judiciary Committee on Thursday gave its stamp of approval to the first major legislative effort meant to stop the largest tech platforms from giving themselves a leg up against competing businesses using their websites, principally Google, Amazon, Facebook, and Apple.
The bill is one of several proposed after a historic inquiry into the technology giants’ power in which The Markup’s work was cited repeatedly by lawmakers. Passing by a margin of 16 in favor to six opposed, the American Innovation and Choice Online Act would bar big tech firms from using their market dominance to give preference to their own products and services over those offered by other firms on their platforms.
“We all use Google and Amazon to shop. Consumers have no idea that Google and Amazon are not giving them the cheapest or best products. They are giving them the products, and preferring the products, that make the most money for them,” Sen. Richard Blumenthal (D-CT), who is a co-sponsor of the legislation, said during the hearing. “We need this bill to help consumers and competitors.”
A 2021 Markup investigation showed that Amazon systematically listed products from its private labels and exclusive brands higher in search results than items from competitors that had better customer ratings and higher sales. That investigation found that simply knowing whether a product was from an Amazon brand or sold exclusively on Amazon could predict whether Amazon would list it at the top of search results about 70 percent of the time.
The previous year, The Markup reported that Google gave its properties a preference in search results. That investigation, which looked at more than 15,000 Google search queries, found that Google gave itself 41 percent of the space on the first page of search results.
The proposed legislation, which now moves to the full senate, only applies to businesses with more than 50 million monthly active users, or 100,000 monthly business users, a market capitalization greater than $550 billion, and that are “a critical trading partner for the sale or provision of any product or service offered on or directly related to the online platform.” The Department of Justice and the Federal Trade Commission would also have the ability to designate a platform as subject to the rule.
Sen. Mike Lee (R-UT), the ranking member of the Senate Antitrust Subcommittee, was one of the six senators who voted against the bill. “I worry that, quite perversely and however unintentionally, it may entrench the very four companies at which it’s aimed by creating a strong incentive to cease doing any business with third parties,” Lee said during the hearing. “This could crush thousands of small businesses and could actually worsen the state of competition in online markets.”
The Computer and Communications Industry Association—which represents Amazon, Apple, Facebook, and Google—has launched a campaign against the legislation. Called “Don’t Break What Works,” the campaign asserts that, if passed, the legislation could put an end to things like free shipping through Amazon Prime or result in charges for previously free products like Google Maps.
According to data from OpenSecrets, Amazon and Meta, Facebook’s parent company, spent the most money on lobbying of any individual firms over the course of last year.
Some smaller tech companies have urged governmental action.
A group of small and midsize business executives, including the CEOs of Sonos and Yelp, met with representatives at the White House on Wednesday to express frustration at how big tech companies wield market power. “Among those challenges, several participants described issues with large platforms both operating a marketplace and selling products on the marketplace, including concerns that the dominant platforms rank their own products and services above those of the independent sellers that rely on them to reach customers,” read a White House statement summarizing the event.
A bipartisan group of lawmakers, led by Rep. David Cicilline (D-RI) and Rep. Ken Buck (R-CO), introduced a counterpart of this bill in the House of Representatives last year. That legislation made it through the House Judiciary Committee but has yet to go before the full House for a vote.
This article was originally published on The Markup and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
Last Updated on February 12, 2022.