Senator Klobuchar’s Tech Reform Bill Advances Outside Committee

Deepak Gupta January 20, 2022
Updated 2022/01/20 at 11:00 PM

A major tech reform bill that would prevent the biggest players in the industry — Apple, Amazon, Google and others — from discriminating against smaller companies that rely on the services of the big platforms is one step closer to being approved on Thursday, after passing the committee in a bipartisan 16-6 votes. Senators Mike Lee, John Cornyn, Ben Sasse, Tom Cotton, Thom Tillis and Marsha Blackburn everyone voted against.

The American Innovation and Choice Online Act, which was sponsored by Senator Amy Klobuchar, would ban Amazon from promoting its own Amazon Basics gear over similar products in search results. Likewise, Apple and Google would be prevented from pushing their in-house apps over those of third-party developers in their respective app stores. The bill was approved by the antitrust subcommittee and the primary judiciary committee with the support of that vote and will now be presented on the Senate floor.

Unsurprisingly, platforms affected by these proposed regulations are not very happy with the recent procedures. Apple’s Tim Cook would have personally lobbied against the bill While Amazon released the following statement:

There’s a reason the small businesses that sell on Amazon are asking Congress to take a look at the “collateral damage” that will befall them and their customers if the American Innovation and Choice Online Act becomes law. This bill is being rushed through the legislative process without any recognition by its authors of its unintended consequences. As worded, the bill’s vague bans and unreasonable financial penalties – up to 15% of US revenue, not revenue – would compromise our ability to allow small businesses to sell on Amazon. The law would also make it difficult to guarantee one- or two-day delivery for these small businesses’ products — Amazon Prime’s key benefits to sellers and customers alike. The bill’s authors target common retail practices and, worryingly, appear to single out Amazon while giving preferential treatment to other large retailers that adopt the same practices. We urge the Senate Judiciary Committee to reject Senator Klobuchar and Senator Grassley’s bill and refuse to pass an ambiguous wording bill with significant unintended consequences.

A similar bill has already been passed by the judiciary committee counterpart in the House, though the president has yet to weigh in on his support for those proposals.

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