House lawmakers have proposed a series of bipartisan laws aimed at controlling the nation’s largest tech companies, including a bill that seeks to turn Amazon.com INC.
and other large corporations did split or ditch their private label products.
If the bills become law, a prospect facing significant hurdles, they could substantially disrupt America’s most valuable businesses and reshape an industry that has extended its impact to nearly every facet of work and life.
One of the proposed measures, titled the Ending Platform Monopolies Act, seeks to require the structural separation of Amazon and other large technology companies to divide their businesses. It would be illegal for a covered online platform to own a business that “uses the covered platform for the sale or provision of products or services” or that sells services as a condition of access to the platform. The platform company also could not own businesses that created conflicts of interest, such as creating the “incentive and ability” for the platform to leverage its own products over its competitors.
A separate bill takes a different approach to target platforms’ self-preference. It would prohibit platforms from conduct that “favors the products, services or lines of business of the operator of the covered platform over those of another commercial user”, or that excludes or puts other companies at a disadvantage.
The proposed legislation would have to pass the Democratic-controlled House as well as the Senate, where it would likely also need substantial Republican support.
Each of the bills has both Republicans and Democrats signed, and more are expected to join, congressional aides said. Seven Republicans are backing the bills, with a different group of three signing each measure, according to a person familiar with the situation.
“Unregulated tech monopolies have too much power over our economy,” said Rep. David Cicilline (D., RI), the top Democrat on the House Antitrust Subcommittee. “They are in a unique position to pick winners and losers, destroy small businesses, raise prices for consumers, and put people out of work. Our schedule will level the playing field. ”
Representative Ken Buck (R., Col.), the panel’s top Republican, said he supports the bill because it “breaks the monopoly power of big technology to control what Americans see and say online, and encourages an online marketplace that encourages innovation. ”
The four companies did not comment on the proposed legislation on Friday. All have defended their competitive practices and have said that they operate their products and services for the benefit of customers.
Matt Schruers, president of the Computing and Communications Industry Association, whose members include Facebook, Amazon and Google, said the House bills would affect the ability of Americans to use the products they like. “Writing regulations for a handful of companies will skew competition and leave consumers worse off,” he said.
Critics of the tech giants praised the legislation. Roku INC.,
which competes with several of the tech giants, applauded lawmakers for “taking a crucial step to curb the predatory and anti-competitive behavior of some of the most powerful companies in the country.”
Getting enough support from the Republic for the bills will be an uphill battle: While Republicans are concerned about the power of tech companies, many are skeptical about changing antitrust laws. Even if passed, the laws could take years to implement as federal agencies try to enforce them despite likely legal objections from companies.
“The fact that there is day one support from Republican antitrust leaders suggests that these bills are definitely in the doable range,” said Paul Gallant, an analyst at Cowen & Co. “But the gap between sounding harsh in a hearing and actually voting for a breakup is significant. I wonder if these bills can go up to 60 [votes] in the Senate. “
Friday’s announcement covered five bills designed to curb Big Tech’s dominance.
Another measure would force online platforms to make their services interoperable with those of the competition, which could mean that different social networks must allow their users to communicate or allow e-commerce sellers to export the opinions of their customers. from site to site, based on a summary provided by lawmakers.
A fourth bill targets mergers, making it illegal for a large platform to acquire potential rivals or rivals. The bill would have prevented only “a small percentage of all tech sector deals” over the past decade, according to the summary.
Lawmakers also introduced a bill to increase filing fees for mergers valued at more than $ 1 billion and lower them for transactions of less than $ 500,000. It would generate an estimated $ 135 million for antitrust enforcement in its first year, according to the summary. The Senate recently passed similar legislation.
Four of the five bills focus strictly on big tech companies. The definitions of companies that the bills are targeting say they must have a market capitalization of $ 600 billion or more, must have more than 50 million monthly active users or 100,000 monthly active business users, and must be a “critical business partner” who has the ability to restrict or prevent another company’s access to customers or services.
While the bills don’t name any companies, only Amazon, Apple, Facebook and Google currently meet the parameters set out in those bills, according to the person familiar with the matter. They are the same companies that the House panel investigated as part of its Big Tech investigation. Walmart INC.,
for example, you operate an online marketplace and have private label products, but only have a market valuation of $ 392 billion, so you would not be subject to the restrictions.
The self-preference bill prohibits actions that “restrict or prevent commercial users from communicating … with users of the covered platform to facilitate commercial transactions,” invoking a common complaint from Amazon’s third-party sellers about limits. in your ability to communicate with customers.
Amazon operates one of the world’s largest platforms for third-party sellers to sell their products, but it also competes with these vendors with its business by selling similar products under a variety of their own internal brands, often priced below their own items. third parties. party vendors.
Some lawmakers have said that the platform favors Amazon’s own products to the detriment of sellers and has rebuked Amazon’s use of third-party data to inform its own line of private-label products. Last year, Akacceleratorfund reported on Amazon employees using third-party data from sellers on their website to launch their own private label lines, violating internal policy.
Later, Amazon opened an investigation into the practice. Testifying before Congress, Amazon Chief Executive Jeff Bezos said, “I cannot guarantee that that policy has never been violated.”
In the past, the Seattle-based company has said that “large companies are not dominant by definition, and the assumption that success can only be the result of anti-competitive behavior is simply wrong.”
If the Ending Platform Monopolies bill passes, Amazon could have to split its business into two separate websites, one for its third-party market and one for the former, or divest or close the sale of its own products. Amazon’s private label division has dozens of brands with 158,000 products. It is also the market leader in devices such as Kindle eReaders, Amazon Echos, Fire TV streaming devices, and Ring doorbells.
The new bill would effectively mean that “a search engine could not own a video service that has incentives to favor search results,” the lawmakers’ summary said, in a thinly veiled reference to Google’s YouTube.
The bill targeting self-preference could affect the way Amazon conducts its retail business and how Apple operates its app store.
Congress has blocked or reversed the expansion of big business before. The End Platform Monopolies Act has been compared to the Glass-Steagall Act, which separated commercial banking from investment banking. Although that provision has since been repealed, banks still have restrictions on conducting nonfinancial business under the Banking Corporations Act of 1956. The Hepburn Act of 1906 restricted the railways to ancillary businesses such as coal mining.
In the absence of congressional action, critics of the technology are looking for federal agencies. Google and Facebook are already fighting antitrust lawsuits, while Amazon and Apple are under antitrust investigation. The Federal Trade Commission Democrats also want to explore the agency’s authority to regulate unfair methods of competition, although that authority is relatively unproven and could face legal challenges.
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