Today, the Senate Judiciary Committee advanced out of committee antitrust legislation against Big Tech companies that would have many harmful consequences for consumers and small businesses.
As my colleague, Carrie Sheffield, and I have written, the American Innovation and Choice Online Act could among many things lead to the end of convenient and low-cost or free services that Americans have come to depend on.
It prohibits businesses from Integrating services and features into a single product. For example, it would ban Amazon Prime, Google Maps from appearing in searches, and Apple from pre-loading FaceTime and Message apps on its products. These are not small and passing inconveniences.
During the pandemic, families who could not leave their homes or find supplies in brick-and-mortar stores for even basic necessities like cleaning products and diapers turned to services like Amazon Prime.
Small businesses, which are supposed to be helped by this legislation, would be hamstrung in many ways. The bill would make it more difficult to find and market to specific customers and would eliminate the services that give them a competitive advantage. The Small Business and Entrepreneurship Council explained:
Indeed, there are now many options available for small businesses to reach consumers online, both big and niche. S. 2992 ignores this market reality… S. 2992 would force only a few companies to separate their marketplace from their own retail offerings, and in the end disrupt a whole range of free or affordable services that both consumers and small businesses benefit from. There is no consumer outcry to do this. Small businesses would be collateral damage.
We can dispel notions that antitrust efforts against Big Tech will slow inflation. Economists worry it would actually fuel inflation.
The Springboard Initiative by the Computer & Communications Industry Association, reports:
By targeting tech, in which inflation is already consistently low and some prices are even declining, the bills would jeopardize free or low-cost services, potentially raising prices and harming the services consumers value.
…
— Proposed anti-tech bills would only make inflation worse by raising the prices of low-cost and free digital services.
— Inflation has remained low in the digital sector, reflecting the scale and efficiency of online services.
— Recent high inflation caused by the pandemic and other economy-wide factors is unrelated to technology firms.
At a time when American households are shelling out 7 percent more on goods and even more on essentials like meat and gas, Washington policies should not make matters worse.
These are far from the only concerns that senators on the Judiciary Committee expressed during the bill markup today.
Others discussed privacy and national security concerns while conservatives worried that it did little to address Big Tech’s censorship of conservative speech but significantly expanded the Federal Trade Commission’s authority to unfairly target companies.
Congress should rightly ensure that an effective system is in place to ensure that companies are not limiting competition. Unfortunately, this bill will do more harm than good.