It Should be the End of the Line for the Senate Antitrust Bill
The American Innovation and Choice Online Act, which advanced out of the Senate Judiciary committee after a markup last Thursday, will hurt U.S. consumers and concentrate even more power at the Federal Trade Commission. Republicans, even those who quarrel with ‘Big Tech’ firms over speech issues, should be wary of this legislation.
The Klobuchar (D-MN) and Grassley (R-IA) sponsored bill would, among other things, prohibit the biggest online platforms — namely Apple, Facebook, Amazon, Google and Microsoft — from favoring their own offerings over those of a third party selling on that platform. Never mind that consumers often benefit from those integrated services, bundled perks and generic options. Here, these dynamic and innovative arrangements are branded as “self-preferencing” and assumed a priori to be detrimental.
Specific examples of the denounced behavior include Google showing its own maps or clips from YouTube in search results. Note that users often find those in-house suggestions very helpful and likely prefer them to endless scrolling through less curated links. Also on the chopping block is Amazon recommending a generic product that might serve consumers best with its lower price or free Prime shipping. Cross-posting between Facebook and Instagram or between Microsoft 365 and LinkedIn might also be prohibited. Apple’s ability to preload its weather and podcast apps onto your new phone would be in peril if the bill became law.
While some lesser competitors of ‘Big Tech’ firms might find the squashing of these valuable arrangements beneficial to their own bottom lines, consumers will sorely miss them. Handicapping market leaders by denying their ability to offer services, combinations and suggestions to their users isn’t the point of U.S. antitrust law. The consumer welfare standard, used as the load star of antitrust regulation for the last forty years, requires proof of consumer harm to ban a business practice. Competitor complaining does not suffice.
GOP politicians who sacrifice the interests of their constituents, who are also online consumers, won’t make any headway on their gripes over alleged suppression of conservative speech online either. Content moderation by large platforms is an equally complicated, but completely separate issue. Tangling speech concerns with antitrust law only serves to muddy the water on both issues.
More generally, the bill and its companion in the House are vague and so invite regulatory mischief. The House version has a private right of action and directs the FTC to create a Bureau of Digital Markets. Since when do Republicans vote for encouraging the plaintiff’s bar and growing the regulatory bureaucracy?
Even populist Republicans, who fear concentrated power in both private and public hands, should resist handing more authority to today’s FTC. Current Chairman Lina Kahn rose to prominence by arguing for the expansion of antitrust to accomplish not just economic ends, but also political goals. Do Republican lawmakers think her FTC will champion conservative causes if handed more power? Again, if the theory is that Chairman Kahn, using her antitrust hammer, will somehow impede large online platform’s ability to moderate content from the right, that’s a serious misreading of the axiom ‘the enemy of my enemy is my friend.”
The specifics of the legislation will regulate away many benefits for consumers. It misunderstands the limited scope of current antitrust law as recognized in U.S. courts by confusing the superior market performance of industry leaders with nonexistent consumer harm. And, lastly, it won’t address the content moderation concerns Republican law makers with these Big Tech companies. This mark-up should be the end of the line for the American Innovation and Choice Online bill.
Jessica Melugin is Director of the Center for Technology and Innovation at the Competitive Enterprise Institute, a free market think tank.
