Amazon, Apple, Facebook and Google could be forced to overhaul their business practices as part of a new major series of antitrust reforms introduced on Friday by a bipartisan group of House MPs.
The package of five bills previously reported by CNBC and other outlets would make it difficult for dominant platforms to enter into mergers and prohibit them from owning companies that have clear conflicts of interest. The law represents the most comprehensive attempt to reform the centuries-old antitrust law in decades.
The bills must be approved by the judicial committee before they reach the plenary. They would also need to be approved by the Senate before they could be put into effect by the President.
The measures go back to a lengthy investigation by the House of Representatives’ antitrust subcommittee on the four companies that closed last year.
At the time, the committee determined that Amazon, Apple, Facebook and Google hold monopoly power and that the antitrust laws should be revised in order to better meet the special challenges of competition in the digital markets.
While Democrats and Republicans disagreed on some solutions, they largely agreed on the alleged competitive damage and that reform was needed to revitalize markets.
Two of the new bills unveiled on Friday could prove particularly difficult for Amazon and Apple as both operate marketplaces that contain their own products or apps that compete with those of other sellers or developers who rely on their services – a risky facility under the new legislation. These bills include the Platform Anti-Monopoly Act (which appears to have been renamed the American Choice and Innovation Online Act) by the House of Representatives Antitrust Subcommittee, David Cicilline, DR.I. and the Ending Platform Monopolies Act, sponsored by Vice Chairman Pramila Jayapal, D-Wash.
In their draft form, the bills have already triggered the rejection of technology-financed groups.
“Adopting the European regulatory model would make it difficult for American tech companies to innovate and compete both here and around the world,” said Geoffrey Manne, president and founder of the International Center for Law & Economics, in a statement. The group has received money from Google in the past.
Adam Kovacevich, CEO of the center-left Chamber of Progress, backed by Amazon, Facebook and Google, among others, published a Medium post earlier this week in which he argued that consumers are losing more than a dozen popular features these two bills should be passed.
Following those suggestions, Kovacevich argued, Amazon might not be able to offer free Prime Shipping on some products, and Google might not be able to provide users with the most popular results for businesses in their area due to anti-discrimination rules on their platforms. He also wrote that Apple is not allowed to pre-install its own “Find My” apps on its devices to help users find lost items. Facebook could not allow easy cross-posting on Instagram, also because of the conflict of interest and the non-discrimination provisions, argued Kovacevich.
Despite the technical pushback, the bipartisan support for the bill is an impressive signal to the industry. The sector has inspired a rare collaboration between Democrats and Republicans, who both believe tech companies have too much power and worry about stagnating innovation.
Spotify and Roku, who have been critical of the tech giants in the past, applauded some of the bills.
Horacio Gutierrez, Spotify’s Chief Legal Officer, called the American Choice and Innovation Online Act “an important step in combating anti-competitive behavior in the App Store ecosystem and a clear sign that the momentum has shifted as the world realizes the need will make fair demands competition in the app economy. “
“Roku applauds Reps. David Cicilline and Ken Buck for taking a critical step in curbing the predatory and anti-competitive behavior of some of the country’s most powerful corporations,” the company said in a statement. “Roku has firsthand experience of competing with and interacting with these monopolists, and we’ve seen them shamelessly ignore antitrust laws and harm consumers by using their dominance in one line of business to stifle competition in another. Aggressive reforms are needed to prevent a future in which these monopolists continue to abuse consumer choice and hinder access to innovative and independent products. “
Here is an overview of the five bills announced on Friday:
- Termination of the platform monopoly law: Sponsored by Jayapal, whose district includes Amazon’s Seattle headquarters, and co-sponsored by Rep. Lance Gooden, R-Tex., This bill would make a platform with at least 50 million monthly active US users and a market cap greater than illegal $ 600 billion to own or operate a business that has a clear conflict of interest. Unlawful conflicts include anything that leads a company to favor its own services over those of a competitor or to disadvantage potential competitors who use the platform. Legislators have previously raised concerns that both Amazon and Apple, each running their own platforms for sellers and developers, could undermine competition due to a conflict of interest for their own competing products or apps.
- American Choice and Innovation Online Act: This bill, proposed by Cicilline and supported by Gooden, would prohibit dominant platforms from giving their own products and services advantages over those of their competitors on the platform. It would also prohibit other types of discriminatory behavior by dominant platforms, e.g. their own competing products, along with several other prohibitions.
- Platform competition and opportunities law: This proposal from Rep. Hakeem Jeffries, DN.Y., supported by Subcommittee Ranking Member Ken Buck, R-Colo. is supported, the burden of proof in merger cases would shift to dominant platforms (defined with the same criteria as the previous draft law). ) to prove that their acquisitions are indeed legitimate, rather than the government having to prove they are reducing competition. The move would likely significantly slow down acquisitions by dominant technology companies.
- Increase in compatibility and competition through the Enabling Service Switching (ACCESS) Act: This bill, proposed by Rep. Mary Gay Scanlon, D-Pa., Endorsed by Rep. Burgess Owens, R-Utah, would require dominant platforms to adhere to certain standards of data portability and interoperability to make it easier for consumers to share their data with them on other platforms.
- Merger Filing Fee Modernization Act: This law, by Rep. Joe Neguse, D-Colo. introduced and supported by Rep. Victoria Spartz, R-Ind., appears to be an accompanying law to the bipartisan bill of the same name in the Senate. The Senate version was passed in this chamber on Tuesday as part of a larger technology and manufacturing bill worth $ 250 billion. The bill would increase the fees companies pay to notify the Federal Trade Commission and the Justice Department’s Antitrust Division of large mergers with the aim of raising money for these agencies.
This story evolves. Check back for updates.
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