US antitrust bill nearing law faces fierce tech opposition

A bipartisan US antitrust bill, which could soon be voted on in the Senate, has reportedly faced an expensive opposition campaign by tech giants.

One of several bills included in a wider antitrust proposal, the American Innovation and Choice Online Act (AICO) has been two years in the making and seeks to forbid tech giants from engaging in ‘self preferencing’, using platform data for unfair profitable advantage, and infringing upon the payment or pricing methodology of competitors.

Bloomberg reports that Google, Apple, Amazon and Meta, alongside trade groups with which they are affiliated, have spent just under $95 million since 2021 to lobby against support for the bill, which they argue will limit their ability to run platforms effectively.

In a similar focus to the EU’s Digital Markets Act (DMA), the AICO would seek to prevent so-called ‘gatekeeper’ firms, those that run the largest online platforms home to many smaller competitors, from abusing their positions of power for financial gain. For example, Google’s promotion of Google Maps reviews when a customer searches for a restaurant or Amazon’s control over which products are listed highest will be put under scrutiny by the bill.

“It is really hard to take on these subjects when you have the biggest companies the world has ever known, that control an inordinate part of the economy, opposed to it,” Vox quotes senator Amy Klobuchar, the co-sponsor of the AICO, as having remarked.

In a blog post from January, Google’s president of global affairs Kent Walker argued that potential US legislation on this level would be damaging for customers and the tech sector:

“Antitrust law is about ensuring that companies are competing hard to build their best products for consumers.

“But the vague and sweeping provisions of these bills would break popular products that help consumers and small businesses, only to benefit a handful of companies who brought their pleas to Washington.”

Those sponsoring the bill are confident that if voted on, it has the support necessary to clear the Senate. But it remains to be seen if the bill will be raised for a vote in the narrow window before the midterm elections in November, which are likely to change the voting balance within the senate.

If enacted, the AICO would give the Federal Trade Commission (FTC), along with the Department of Justice, the authority to sue companies that fail to comply, though what the penalty could look like has yet to be determined.

The bill comes to vote as many legislators around the world consider the power that many tech giants exert over their market. The EU has recently opened an investigation into Google’s dominance over the Play Store, which sees it charging high developer fees and limiting the extent to which apps can use alternative billing systems, while in the UK, the Competition and Markets Authority (CMA) has opened an investigation into whether Amazon’s platform gives its retail arm an unfair advantage over third-party sellers.

Despite individual reviews of monopolistic practice, however, the UK is not yet pursuing big tech regulation to the same degree as the EU is with the DMA. Set to come into effect in Spring 2023, this will greatly curb the extent to which tech giants can use platforms to unfairly push their services, as well as protect data from being used to damage the competitiveness of the market.

In particular, the act seeks to limit the powers of gatekeeper companies. Such firms that fail to comply with the rules will face fines of up to 10% of their worldwide turnover, or 20% on repeat offences.

Without lobbying power in Europe as in the US, there is little that Google or any other tech giant can do to halt the implementation of the DMA, and companies may be forced to change their worldwide practice as a result.