Big Tech vs the American Innovation and Choice Online Act

Puja Valera

Associate Editor

Loyola University Chicago School of Law, JD 2023

Amazon, Apple, Facebook, and Google are dominating the headlines with record-breaking profits and dismissals of antitrust lawsuits; however, that may not last long with new antitrust bills gaining traction in Congress. In fact, when the Senate Judiciary Committee voted 16 – 6 to advance a major antitrust bill on January 20, 2022, the American Innovation and Choice Online Act, the tech companies stock prices dipped. Currently, with bipartisan support, the bill is on a path to pass the Senate.

What is the American Innovation and Choice Online Act?

The American Innovation and Choice Online Act, or S.2992, was introduced by Senator Amy Klobuchar, D-MN, and also had a bipartisan co-sponsor/co-author in Senator Chuck Grassley, R-IA. Its stated goal is “To provide that certain discriminatory conduct by covered platforms shall be unlawful, and for other purposes”.

Specifically, the bill targets the Big Four technology companies, Amazon, Apple, Google, and Facebook, and prevents these dominant companies from behaving in a discriminatory manner. The Act defines dominant platforms as companies that have a specific number of users and market capitalization. In particular, this bill would prohibit platforms from giving their own products and services advantages over those of competitors also on the platform. It also seeks to prohibit other types of discriminatory behavior such as preventing a competitor from using the platform’s services and  using private data collected on their own services to create an advantage for themselves.

What does this mean for the targeted tech companies?

This bill will prevent the big tech companies from favoring their own products. For example, Amazon will be prohibited from listing its own products higher in a search ranking than products created by a third-party rival. In Apple and Google’s case, they will not be allowed to unfairly rank their own apps higher than a third party’s app in their own app stores. The bill will also bar dominant platforms from preventing interoperability with other services and from gathering data another company’s data to compete against them.

In response, the tech companies are furiously lobbying and launching huge public relations campaigns in an effort to prevent the bill’s passing. Senator Ted Cruz, R-TX, had a forty minute phone call with Apple CEO Tim Cook discussing the bill, however, Senator Cruz was still prepared to move the bill out of committee at the end. Senator Cruz said that Cook raised the concern that the bill was rushed and would make it more difficult for consumers to opt out of monitoring from various apps reducing Apple’s ability to serve its consumers, but that he, Cruz, does not believe it would have that effect at all.

Industry groups have also spoken out against the bill. Chamber of Progress, a tech-funded group, shares the concerns brought up by senators opposing the bill, calling them fundamental since the bill itself implicates consumers, security, and competition. On the other side, some industry groups like the American Economic Liberties Project, firmly supports the bill and emphasizes the need for Congress to take on the power of Big Tech. Sarah Miller, the Executive Director of the group, supports the legislation specifically because of its ability to restore competition and transparency to the tech market.

On the other side, some technology firms such as Sonos and Yelp are in favor of the new bills. These companies met with White House officials about barriers to competition in the tech industry in hopes of seeing reforms enacted. Allegedly, according to Yelp, Google has been behaving anticompetitively by prioritizing its own services in search results even though Yelp had better reviews. Both aforementioned companies along with others stated that the bill would help to restore competition in the digital marketplace and remove barriers to consumers to choose the services they want.

What does the path forward look like for the bill?

Currently, the bill is set to move to the Senate floor, but there is a possibility that the committee may hold another hearing about it. In the most recent hearing, senators opposing the bill noted that of the 100 amendments that were proposed, there were some still worth discussing. On the Senate Judiciary Committee, Senator Mike Lee, R-UT, was specifically concerned with how broad the bill was written and that there was a risk of collateral damage by reducing services that consumers and businesses like. Other senators that supported the bill wanted to see more changes and debate in order for their approval to continue to the floor vote. Supporters met with White House officials to secure backing, but the Biden administration has not voiced an opinion on the bill yet.