Bill Targeting Big Tech Advanced Out of a Senate Committee on Bipartisan Vote

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In what could be the most significant step toward regulating Big Tech, a bipartisan bill to change online shopping dramatically is moving ahead in the Senate. But the progress for the bill showcased the cracks in bipartisanship that might prevent it from passing into law.

Democratic Sen. Amy Klobuchar of Minnesota and Republican Sen. Chuck Grassley of Iowa have championed a bill that would ban online vendors such as Amazon from favoring their products. Supporters view the bill as leveling the playing field for smaller firms, while opponents fear the attack on the tech giants will reduce users’ privacy, security, and convenience.

Ahead of the markup, groups  representing industry leaders blanketed social media with warnings about the legislation. For example, for fear of running afoul of prohibitions on “self-preferencing,” Amazon might not promote its popular Prime service or its generic products, and Google might not show Google Maps among its search results. In addition, the law could force Apple to lower its privacy and security standards in its App Store or be unable to pre-install iMessage or FaceTime on its phones.

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.

More than 40 smaller competitor tech companies told the committee the bill is needed because of “self-preferencing tactics” they claim larger firms use to maintain “gatekeeper status in the market.” The smaller companies’ letter cited “manipulative design tactics to steer individuals away from rival services,” limiting competitors’ access to consumer data, putting up barriers to competing systems operating on their platforms, and making it “impossible or complicated for users to change their default settings or services.”

But the Big Tech firms have their allies. The U.S. Chamber of Commerce sounded broader concerns about the Grassley-Klobuchar bill that reflect growing anxiety about widespread enthusiasm for regulatory action in Washington. The trend is seen in last week’s joint announcement from the Federal Trade Commission and the Department of Justice of plans to revise antitrust merger guidelines and the Biden administration’s July executive order instructing agencies to crack down on “consolidation” in business.

The Chamber wrote of the proposed restrictions for online platforms: “This legislation represents a gateway to supporting a larger and radical antitrust agenda that seeks to divorce economic analysis from the law.”

Opponents of the bill also complained that the judiciary subcommittee that voted on the bill last week never held a hearing. The legislation was put into its final form before a committee vote on Jan. 20. Debate between senators showcased some policy concerns that might have been resolved through expert testimony and questioning during a hearing.

Democratic Sen. Dianne Feinstein of California, whose home state is where many of the tech firms targeted by the bill are based, took issue with the proposed regulations only applying to the most prominent platforms, saying, “It’s difficult to see the justification for a bill that regulates the behavior of only a handful of companies while allowing everyone else to continue engaging in that exact same behavior.”

Republican Sen. Ted Cruz of Texas said the double standards in the bill were a good thing.

“Several members of this committee have said, ‘Well, gosh, why is it focused on the giant companies?'” he said. “Well, because they’re the monopolists. We’re not really concerned about the mom and pop store, even if they engage in bad conduct.”

Read the full article at The Washington Examiner.