A major Senate bill that would prevent tech companies from giving preference to their own products and services has just passed a significant hurdle in Congress, bringing it one step closer to becoming law.
The Senate Justice Committee voted today American Innovation and Choice Online Act, moving the prominent antitrust bill to a Senate floor vote. The bill passed the committee’s 16-6 vote on Thursday, with five Republicans joining Senate Democrats in advancing the legislation.
The bill would prohibit tech platforms from “favoring their own products or services, disfavoring rivals, or discriminating between companies that use their platforms in a way that would materially harm competition on the platform.” It would also prohibit dominant platforms from preventing interoperability with other services and from leveraging another company’s data on the platform to compete with them.
To achieve its goals, the American Innovation and Choice Online Act would empower antitrust enforcers with “strong and flexible tools” including “civil penalties, authority to seek broad injunctions, emergency injunctions, and potential loss of executive pay.”
Senator Amy Klobuchar (D-MN), who chairs the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights, hailed the legislation as the first major technology competition bill to hit the Senate floor “since the beginning of the internet. ” The bill could still see changes to a handful of amendments that did not impede its progress on Thursday, but could still affect its final wording.
While it still has an uphill task to make it a crowded and largely stalled legislative agenda, the bill’s momentum was significant enough to prompt Google and Apple to mull over comments earlier this week.
“Every day, millions of Americans use online services like Google Search, Maps and Gmail to find new information and get things done,” said Alphabet Global Affairs President and Chief Legal Officer Kent Walker. wrote in a blog post. “…The legislation being debated in the House and Senate could break these and other popular online services, making them less useful and less secure, and undermining American competitiveness.”
Apple also sought to intervene, writing a letter Senate Judiciary Chair Dick Durbin, Committee Republican Chuck Grassley, Antitrust Subcommittee Chair Amy Klobuchar, Subcommittee Ranking Member Mike Lee.
“After a tumultuous year that has seen numerous controversies regarding social media, whistleblower allegations of long-ignored risks to children, and ransomware attacks that have crippled critical infrastructure, it would be ironic if Congress responded by making it much more difficult to protect privacy and security of Americans’ personal devices,” wrote Apple’s Senior Director of Government Affairs, Tim Powderly. “Unfortunately, that’s what these accounts would do.”
Both companies argued that the bill, along with other legislation, the Open App Markets Act, would undermine consumer safety. The latest bill would force companies that control operating systems to allow third-party apps and app stores and allow developers to tell consumers where they can find the same software at better prices.
ONE technology company group which included Yelp, DuckDuckGo, Sonos, Spotify, Proton, Match Group and startup accelerator Y Combinator, along with venture capital firm Initialized Capital, spoke out in favor of anti-self-preference legislation earlier this week.
“Findings from the United States and governments around the world reveal the many anti-competitive self-preference tactics that dominant technology companies use to achieve and consolidate their stewardship status in the marketplace at the expense of competition, consumers and innovation,” the companies wrote. “The American Innovation and Choice Online Act… aims at self-preference to help restore competition in the digital marketplace and remove barriers for consumers to choose the services they want.”
Regulating the tech industry is a rare issue that inspires bipartisan cooperation in Congress — another sign that the tech industry should expect further restrictions on its business, even if these proposals are still making slow progress.
The bill was introduced by Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) and is co-sponsored by Dick Durbin (D-IL), Lindsey Graham (R-SC), Richard Blumenthal (D- CT) ), John Kennedy (R-LA), Cory Booker (D-NJ), Cynthia Lummis (R-WY), Mark Warner (D-VA), Mazie Hirono (D-HI), Josh Hawley (R-MO) ), Sheldon Whitehouse (D-RI) and Steve Daines (R-MT).
The House version of the bill, led by House Antitrust Subcommittee Chair David N. Cicilline (D-RI) and ranking member Ken Buck (R-CO), is now out of committee and ready for a vote.