As rising inflation continues to pinch families and wipe out wage growth, U.S. Senators led by Amy Klobuchar (D-Minn.), chair of the Senate Judiciary Committee’s antitrust subcommittee, and Sen. Charles E. Grassley of Iowa, the lead Republican on the Senate Judiciary Committee, want to add insult to injury through a new bill that will hike prices and restrict choice for online shoppers.
Due to COVID-19, Americans grew more comfortable and conversant with online shopping than beforehand, and many want to keep conveniences that allow them to shop safely from home. A third of U.S. consumers say “they will have no burning need to return to in-store shopping even after the pandemic has fully passed,” according to Forrester Research.
Unfortunately, Klobuchar’s bill would turn the clock back on Internet shopping innovation, working in tandem with efforts in the U.S. House (a good rundown on those efforts by our Patrice Onwuka is here) to restrict choice and jack up prices. We have also written about these House bills here, here, and here.
Inaccurately dubbed the “American Innovation and Choice Online Act,” Klobuchar and Grassley’s proposal would likely cause small businesses to lose the competitive advantages that allow them to compete successfully on a global scale.
Ironically, these senators are making this move during National Women’s Small Business Month, when we should be celebrating how technology empowers women to bring their entrepreneurial dreams to life in the private marketplace. Tech platforms offer female entrepreneurs immense visibility and business tools.
Yet, the conveniences and accessibility that small businesses depend upon may be at risk by this new antitrust bill. Instead of creating a more equal playing field for big and small companies to compete, the American Innovation and Choice Online Act creates hurdles for small businesses that run counter to antitrust objectives. For example, by ending targeted campaigns, it will be more difficult for small businesses like black-owned and veteran-owned enterprises to find customers for their unique goods and services.
The American Innovation and Choice Online Act would prohibit large tech companies from engaging in common industry-wide retail practices such as self-preferencing of their goods on their platforms and offering combined services at a discount.
In addition to the harm to small businesses, according to Carl Szabo, general counsel at NetChoice (a digital freedom coalition), the bill would also force Google to hand over personal information to bad actors, ban Amazon from offering Amazon 2-day Prime shipping, block Microsoft from bundling Word and Office365, and force Facebook to make our data less secure.
Just as Americans are scrambling to keep up heading into the holidays like Halloween, Klobuchar and Grassley are trying to play tricks on families. American antitrust laws are meant to protect consumers from harm, but these Senators’ approach would eliminate the standard of consumer harm, which has been relied on for decades during antitrust analysis.
However well-intentioned these legislators may be, their end result will make America less competitive abroad and shopping less affordable for American families at home.