- Amazon, Apple, Facebook and Google could be forced to overhaul their business practices under an expansive set of antitrust reforms introduced by a bipartisan group of House lawmakers on Friday.
- The package of five bills would make it harder for dominant platforms to complete mergers and prohibit them from owning business lines that present clear conflicts of interest.
- The measures come in the wake of a lengthy investigation by the House Judiciary subcommittee on antitrust into the four companies that was completed last year.
The package of five bills, draft versions of which were reported by CNBC and other outlets, would make it harder for dominant platforms to complete mergers and prohibit them from owning businesses that present clear conflicts of interest. The legislation represents the most comprehensive effort to reform century-old antitrust laws in decades.
The bills will need to be voted on favorably by the Judiciary Committee before making their way to the full House. They would also need to be approved by the Senate before they could be signed into law by the president.
The measures come in the wake of a lengthy investigation by the House Judiciary subcommittee on antitrust into the four companies that was completed last year.
The panel found at the time that Amazon, Apple, Facebook and Google hold monopoly power and that antitrust laws should be revised to better deal with the unique challenges of competition in digital markets.
While Democrats and Republicans diverged on some of the solutions, they mostly agreed on the alleged competitive harm and that reform was necessary to reinvigorate the markets.
Two of the new bills introduced Friday could prove especially difficult for Amazon and Apple to navigate, given both operate marketplaces that include their own products or apps that compete with those of other sellers or developers that rely on their services, a risky set-up under the new legislation. Those bills comprise the Platform Anti-Monopoly Act — which seems to have been renamed the American Choice and Innovation Online Act — sponsored by House Judiciary subcommittee on antitrust Chairman Rep. David Cicilline, D-R.I., and the Ending Platform Monopolies Act, sponsored by Vice Chair Pramila Jayapal, D-Wash.
The bills, in their draft form, already inspired pushback from tech-funded groups.
"Adopting the European regulatory model would make it harder for American tech companies to innovate and compete both here and globally," Geoffrey Manne, president and founder of the International Center for Law & Economics, said in a statement. The group has received funding from Google in the past.
Adam Kovacevich, CEO of center-left advocacy group Chamber of Progress, backed by Amazon, Facebook and Google, among others, published a Medium post earlier this week arguing that consumers would lose out on more than a dozen popular features should those two bills pass.
Under those proposals, Kovacevich argued, Amazon would not be able to offer Prime free shipping for some products and Google could not serve users the most popular results for businesses in their areas because of rules against discriminating on their platforms. He also wrote that Apple would not be allowed to pre-install its own "Find My" apps on its devices that help users locate lost items. Facebook couldn't allow for easy cross-posting to Instagram, also due to the conflict of interest and non-discrimination provisions, Kovacevich argued.
Despite tech pushback, the bipartisan support for the bill is a formidable signal to the industry. The sector has inspired rare collaboration between Democrats and Republicans, who both believe tech companies have come to hold too much power and worry about stagnating innovation.
Spotify and Roku, which have been critical of the tech giants in the past, applauded some of the bills.
Spotify Chief Legal Officer Horacio Gutierrez called the American Choice and Innovation Online Act "an important step in addressing anti-competitive conduct in the App Store ecosystem, and a clear sign that momentum has shifted as the world is waking up to the need to demand fair competition in the App economy."
"Roku applauds Reps. David Cicilline and Ken Buck for taking a crucial step toward curbing the predatory and anticompetitive behaviors of some of the country's most powerful companies," Roku said in a statement. "Roku has firsthand experience competing against and interacting with these monopolists, and we've seen how they flagrantly ignore antitrust laws and harm consumers by leveraging their dominance in one line of business to stifle competition in another. An aggressive set of reforms is needed to prevent a future where these monopolists further abuse consumer choice and hamper access to innovative and independent products."
Here's an overview of the five bills announced on Friday:
- Ending Platform Monopolies Act: Sponsored by Jayapal, whose district includes Amazon's headquarters of Seattle, and co-sponsored by Rep. Lance Gooden, R-Texas, this bill would make it unlawful for a platform with at least 50 million monthly active U.S. users and a market cap over $600 billion to own or operate a business that presents a clear conflict of interest. Unlawful conflicts would include anything that incentivizes a business to favor its own services over those of a competitor or disadvantage potential competitors that use the platform. Lawmakers have previously expressed concern that both Amazon and Apple, which run their own platforms for sellers and developers, respectively, 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 co-sponsored by Gooden, would prohibit dominant platforms from giving their own products and services advantages over those of competitors on the platform. It would also prohibit other types of discriminatory behavior by dominant platforms, such as cutting off a competitor that uses the platform from services offered by the platform, and ban dominant platforms from using data collected on their services that isn't public to others to fuel their own competing products, among several other prohibitions.
- Platform Competition and Opportunity Act: This proposal from Rep. Hakeem Jeffries, D-N.Y., co-sponsored by subcommittee ranking member Ken Buck, R-Colo., would shift the burden of proof in merger cases to dominant platforms to prove that their acquisitions are in fact lawful, rather than the government having to prove they will lessen competition. The measure would likely substantially slow down acquisitions by dominant tech firms.
- Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: This proposed bill from Rep. Mary Gay Scanlon, D-Pa., and co-sponsored by Rep. Burgess Owens, R-Utah, would mandate dominant platforms maintain certain standards of data portability and interoperability, making it easier for consumers to take their data with them to other platforms.
- Merger Filing Fee Modernization Act: This bill, introduced by Rep. Joe Neguse, D-Colo., and co-sponsored by Rep. Victoria Spartz, R-Ind., appears to be companion legislation to the bipartisan bill of the same name in the Senate. The Senate version passed in that chamber on Tuesday as part of a larger $250 billion tech and manufacturing bill. The bill would raise the fees companies pay to notify the Federal Trade Commission and Department of Justice Antitrust Division of large mergers with the goal of raising money for those agencies.