Ten Terrible Tech Bills from the 117th Congress: American Innovation and Choice Online Act

As Congress enters its final weeks before the midterm elections, many expect a late push to pass legislation targeting the largest technology companies. Dozens of bills have been introduced during the 117^th Congress, many with bipartisan support in both chambers.

It’s not surprising that antitrust has been the primary focus, but legislators continue to take an interest in online advertising, content moderation, and the liability protections afforded by Section 230 of the Communications Decency Act.

The bad bills far outnumber the good ones. This blog series will identify the 10 worst tech bills introduced during the 117^th Congress.

1. American Innovation and Choice Online Act

Sens. Amy Klobuchar (D-MN) and Charles Grassley (R-IA) introduced the American Innovation and Choice Online Act (S. 2992) in October 2021, four months after the House version (H.R. 3816) was introduced. The Department of Justice gave the legislation its stamp of approval in March, its first public backing of an antitrust bill.

The bill aims to prohibit self-preferencing by companies that also allow competitors to sell goods and services on their platform. As CEI Senior Fellow Ryan Young, points out, the bill’s narrow focus on online commerce is misplaced:

Sure, you buy store brand products all the time at the grocery store and from Costco, but have you ever bought store brand products—ONLINE?! The distinction between in-person commerce and online commerce is silly. … Nearly every business, big or small, has at least some online presence, and they have for a while. Sellers sell and buyers buy. Whether in person, by phone, by mail, or online are just different means to the same end.

The legislation would limit a company like Amazon from displaying its generic brand products, such as Amazon Basics, while a user shops on its platform. The practice is no different than Walmart stocking its Great Value brand strategically on its store shelves. It may even place its products closer to the entrance than competing name brand items. Walmart markets their generic AAA batteries at about half the price of its competitors, and yet, consumers still choose to purchase name brand options by Energizer and Duracell.

The American Innovation and Choice Online Act is also expected to affect other online products like Google’s promotion of Google Maps and Apple’s preinstallation of the iMessage or FaceTime apps. Consumers often benefit from these services. Jessica Melugin, Director of the Center for Technology and Innovation at CEI, makes this point in the Washington Examiner:

Consumers often experience the large online platform’s practices as advantages, such as lower price points with generics, free shipping with Prime, more helpful search results using location data, and the convenience of bundled and integrated services. As a result, smaller rivals feel their offerings are being discriminated against unfairly.

The American Innovation and Choice Online Act, its title notwithstanding, would only lead to less innovation and less consumer choice.