Last month, Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) fired the latest and perhaps most high-profile legislative salvo against Big Tech to date – the proposed American Innovation and Choice Online Act. This Senate bill would update the antitrust laws with the specific goal of reigning in large technology companies. This comes after a year of high-profile hearings in which the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights, under Klobuchar’s direction, has investigated the conduct of Apple, Google, and other big tech companies.
The Senate bill explicitly targets a small group of firms that operate “covered platforms.” Covered platforms (1) have 50 million monthly active users or 100,000 monthly active business users; (2) have sales or a market capitalization exceeding $550 billion; and (3) are a “critical trading partner for the sale or provision of any product or service offered on or directly related to the online platform.” This description implicates only the largest and most dominant tech platforms.
The Senate bill primarily aims to curtail conduct in which big tech companies leverage their dominant platforms to preference their own products and services, effectively crowding out other companies that compete on the platform. The bill is designed to give competing businesses a more even playing field when they compete against big tech firms on the firms’ own platforms, in three key ways.
First, the bill would explicitly prohibit conduct that “unfairly preference[s] the covered platform operator’s own products, services, or lines of business over those of another business user on the covered platform in a manner that would materially harm competition on the covered platform.” Second, the bill would disallow unfair interference with competitors who seek to offer their products, services, or lines of business on the covered platform if those options compete with the covered platform operator’s own products or services. Third, the bill would forbid firms that operate covered platform from discriminating in the application or enforcement of their terms of service against other business users on the platform.
The bill also designates seven specific business practices by which big tech firms leverage covered platforms for competitive advantage as “unlawful conduct.” Perhaps most significant among these is the prohibition against restricting a competitor’s ability to “access or interoperate with the same platform, operating system, hardware or software features that are available to the covered platform operator’s own products, services, or lines of business that compete or would compete with products or services offered by business users on the covered platform.” This would directly impact companies like Apple, which prohibit “sideloading” and exert tight control over the programs and applications that can run on the their operating systems. Additionally, the bill restricts tech companies from “treat[ing their] own products, services, or lines of business more favorably relative to those of another business user than they would be treated under standards mandating the neutral, fair, and non-discriminatory treatment of all business users,” including in “search or ranking functionality offered by the covered platform.” This prohibition appears to implicate Google, whose competitors have long accused it of biasing search results to favor its own products and services.
The American Innovation and Choice Online Act accompanies a House bill called the “American Choice and Innovation Online Act.” The House bill, introduced on June 11 by Democrat David Cicilline (RI-01) and Republican Ken Buck (CO-04), was voted out of the House Judiciary Committee on June 24. It enjoys significant bipartisan support, including 14 Democrat cosponsors and 8 Republican cosponsors. The Senate iteration appears to have similar appeal across the aisle; its 12 cosponsors include 6 Democrats and 6 Republicans. Despite the bipartisan support, neither bill has yet to receive a floor vote.
Importantly, while the American Innovation and Choice Online Act is one of the most prominent and widely supported antitrust bills unveiled this year, it is hardly alone. In addition to the American Choice and Innovation Online Act, the House Antitrust Subcommittee has also unveiled the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act (requiring covered platforms to “maintain a set of transparent, third-party-accessible interfaces . . . to enable the secure transfer of data to a user”), the Ending Platform Monopolies Act (prohibiting technology platforms with at least 50,000,000 monthly active U.S.-based users and a market capitalization of over $600 billion from also selling products or services that they own and control), the Platform Competition and Opportunities Act (shifting the burden of proof in merger review, requiring covered platforms to demonstrate that their acquisitions are lawful), and the Merger Filing Fee Modernization Act (increasing the fees associated with Hart-Scott-Rodino Act filings for larger mergers).
On the Senate side, Senator Klobuchar has also introduced the Competition and Antitrust Law Enforcement Reform Act of 2021, which increases antitrust enforcement budgets, strengthens prohibitions against anticompetitive mergers, and updates the Clayton Act to prohibit “exclusionary conduct that presents an appreciable risk of harming competition.” Further, Senator Mike Lee (R-UT), has introduced the Tougher Enforcement Against Monopolists Act (creating market-share presumptions for merger review and codifying the consumer welfare standard), State Antitrust Enforcement Venue Act (allowing state attorneys general to keep antitrust defendants in their desired fora), and the One Agency Act (consolidating merger review in the Department of Justice). Senator Josh Hawley (R-MO) has also introduced the Trust-Busting for the Twenty-First Century Act, which would explicitly ban companies with market capitalizations exceeding $100 billion from any mergers or acquisitions.
While it is highly unlikely that all these competing bills will become law, some amount of legislated antitrust reform targeting Big Tech seems almost inevitable.