Imagine shopping for a bicycle. You decide on a Trek bike after evaluating the options, user reviews, and specifications. The bicycle is delivered but without tires. You then attempt to purchase tires by Bontrager, which is owned by Trek. After all, you’ve decided you like the brand and its products. That’s why you purchased the Trek bike in the first place.
Trek promptly informs you that they are unable to sell you Bontrager tires for your Trek bike, because federal law prohibits it. They’re permitted to sell you Bontrager tires for a Schwinn bike, but selling you both a bike and tires would constitute a conflict of interest and could prompt the Federal Trade Commission (FTC) to file a civil action against them.
Sounds silly? Congress doesn’t think so. One piece of legislation introduced in the 117th Congress would establish a similar regulatory scheme, designed to target the most popular products in the tech industry.
7. Ending Platform Monopolies Act
The Ending Platform Monopolies Act (H.R. 3825)—introduced in the House in June of 2021 and sponsored by Reps. Pramila Jayapal (D-WA) and Lance Gooden (R-TX), with bipartisan support from over a dozen co-sponsors—takes an approach similar to the American Innovation and Choice Act (S. 2992), by limiting a company’s ability to operate a business that competes with other companies on its platform. But, as CEI Vice President for Strategy and Senior Fellow Iain Murray points out, the Ending Platform Monopolies Act would enact more preventive measures:
The Jayapal bill goes further, essentially saying that if you offer your services as a platform to an enterprise, you cannot compete with it. This bill would allow federal agencies to break up companies that run afoul of these punitive restrictions.
As TechFreedom’s Berin Szóka and Corbin K. Barthold put it, “This is, in effect, common carriage regulation on steroids.”
The bill would deter platform companies like Apple and Google from preinstalling apps on their hardware. Apple iPhones would no longer come out of the box with its iMessage, FaceTime, and Find My iPhone apps installed. Likewise, Google’s certified version of Android would exclude popular apps like Google Maps and Chrome. And Amazon may be limited in its ability to offer free shipping on eligible Prime products or distribute its Amazon Basics brand.
Further, depending on how the law is enforced, both Apple’s iOS and App Store could be designated as covered platforms. In turn, the company would be prohibited from both preinstalling and distributing Apple apps. The same would apply to Google’s Android OS and Play Store. In theory, one could download the Google Maps app on an Apple device, but not Apple Maps. And an Android user could download the Apple TV app, but not Google’s YouTube app.
The legislation would also disincentivize other retail outlets from growing their online presence to compete with Amazon. If they grow to meet the monthly threshold of 50 million users or 100,000 business users in the U.S., it would bring them under the purview of the Act. That would discourage innovation and competition.
These platforms have created a ripe ecosystem for startups, small businesses, developers, and entrepreneurs to reach customers and deliver their products. But, according to the Ending Platforms Monopolies Act, opening up your platform to competitors is a bad thing.