The American Innovation and Choice Online Act (AICOA), a bill that forbids Big Tech platforms like Apple, Alphabet (Google’s parent company), and Amazon from generally behaving in an anti-competitive manner, was approved by the Senate Judiciary Committee late last week with a 16-6 vote.
US Senator Amy Klobuchar of Minnesota, a primary sponsor of the bill, called this “the first time that a major tech bill on competition has advanced to the Senate floor since the dawn of the internet.”
What is antitrust law?
Antitrust law is a set of statutes aimed at protecting consumers by ensuring that no single company or group of companies gain so much power that they can tip market prices in their favor, or warp the competitive market. In the United States, the Federal Trade Commission (FTC)—in tandem with the Bureau of Economics—is the governing agency that enforces antitrust laws.
Antitrust laws protect against tactics that don’t promote innovation and competition. Countries all over the world have their own version of these laws, such as the Competition and Consumer Act 2010 (CCA) (Australia), the Brazilian Antitrust Law [PDF] (Brazil), the Anti-Monopoly Law of the People’s Republic of China (China), and the Antimonopoly Act (Japan).
Countries with antitrust laws enforce it their own way. The US Department of Justice (DOJ), for example, can file a civil or criminal charge against the companies or the executives heading them.
About AICOA and its possible effects
The American Innovation and Choice Act is a bill aimed at breaking up Big Tech firms and curbing their allegedly monopolistic behavior. It was first introduced by Rep. David Cicilline of Rhode Island and Rep. Ken Buck of Colorado in June 2021 along with four other bills, namely: the Platform Competition and Opportunity Act, the Ending Platform Monopolies Act, the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, (which we wrote about previously) and the Merger Filing Fee Modernization Act.
“Right now, unregulated tech monopolies have too much power over our economy,” Cicilline said in a press release last year. “They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us.”
Unfortunately, AICOA was voted out of the House Judiciary Committee.
In October 2021, three months later, Senators Klobuchar and Chuck Grassley—of Iowa—introduced a similar bill that shares the same name and broad features of Cicilline’s bill. This, eventually, resurrected AICOA from the grave.
This bill prohibits companies—which fit in a criteria that would be set out by the FTC pertaining (but perhaps not limited) to active userbase and market cap—from discriminating against other businesses that rely on their platform by favoring their own products and services.
If the Senate passes the bill, it would make it illegal for companies with their own marketplace, such as Amazon, Apple, and Google, from favouring their own products and services over other competitors. Amazon, for example, would be barred from ranking its AmazonBasics brand higher than other brands in search results on the Amazon market.
But AICOA’s implications could go beyond this, as many have pointed out on Twitter:
With the American Innovation and Choice Act passing a Senate committee vote and making its way to the full Senate, in spite of its many, many criticisms, you can expect the fiery debate to go on from both sides. Note, however, that the current administration has yet to take a stance on this matter.