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Amazon, other technical giants could be forced to lay off assets under the house bill



House lawmakers are preparing to propose bipartisan legislation that may require Amazon.

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com Inc. and other technology giants to effectively split into two companies or throw away their private label products, according to people familiar with the matter and documents seen by The Wall Street Journal.

The bill, which people said could be announced Friday, could require structural separation of Amazon and other major technology companies, which Congress spent 15 months examining as part of a study of Big Tech’s size and power. Another bill, which could also be announced Friday, addresses the ability of large technology companies to leverage their online platforms to favor their own products over competitors.

Each of the bills has both Republicans and Democrats signed, and more are expected to participate once they are announced, according to a person familiar with the matter.

Called the Ending Platform Monopolies Act, a draft of the proposed law on structural separation reviewed by the journal, it states: “It must be illegal for a covered platform operator to own or control a business, other than the covered platform, when the covered platform owns or control of this industry gives rise to an incompatible conflict of interest. “This language may change in the final draft of the bill.

The proposed legislation was to be passed by the Democratic-controlled House as well as the Senate, where it would likely also need significant Republican support. While Republicans are concerned about the power of technology companies, many are skeptical about changing antitrust laws.

The proposed bills are among five considered bills aimed at curbing the dominance of technology giants including Apple Inc.,

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Facebook Inc.

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and the alphabet Inc.’s

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Google in addition to Amazon. The other bills address issues such as data portability and the ability of large companies to make acquisitions that pose a competitive threat.

The bulk of the legislation is narrowly concentrated only on large technology companies. The definitions of companies targeted by the bills say they must have a market value of $ 600 billion or more, must have more than 500,000 active monthly users, and must be a critical trading partner.

Only four companies – Amazon, Apple, Facebook and Google – currently meet the parameters listed in the bills, according to one of the population, and they are the same companies that Congress investigated as part of its study of Big Tech . Walmart Inc.,

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operates, for example, an online marketplace and has private label products, but has only a market value of 392 billion. $, so it would not be subject to any of the bills, according to a person familiar with the matter.

The proposed Ending Platform Monopolies Act has been compared to the banking sector’s Glass-Steagall Act, which separates commercial and investment banking.

Amazon operates one of the world’s largest platforms for third-party sellers to chop their goods, but also competes with these suppliers with its business, which sells similar products under a range of its own internal brands – often priced under the goods of its third-party sellers.

Amazon’s worldwide consumer manager Jeff Wilke discusses the proliferation of the company’s private labels. He speaks at WSJ Tech Live.

Congress has said the platform favors Amazon’s own goods at the expense of sellers and has reprimanded Amazon’s use of third-party data to inform its own line of private label goods. Last year, the Journal reported on Amazon employees using third-party data from sellers on its website to launch its own private label lines, which violated an internal policy.

Amazon later opened an investigation into the process. As he testified before Congress, Amazon CEO Jeff Bezos said, “I can not guarantee you that this policy has never been violated.”

If a structural separation bill were to be adopted, Amazon might have to split its business into two separate sites, one for its third-party market and one for first-party, or divest or close the sale of its own products. Amazon’s private label division has dozens of brands with 158,000 products. It is also the market leader in devices like Kindle eReaders, Amazon Echos, Fire TV streaming devices, Ringtone bells and a range of portable devices.

Amazon did not immediately comment on the proposed legislation. In the past, the Seattle firm has said that “large corporations are not dominant by definition, and the assumption that success can only be the result of anti-competitive behavior is simply wrong.”

Other proposals circulating on Capitol Hill also aim to change U.S. antitrust law in response to the perceived dominance of large technology companies.

Another bill aims at self-preference, a practice in which a company exploits a dominant platform or exclusive access to data for the benefit of other business areas, e.g. By favoring its proprietary products or services in the search results. It could affect how Amazon runs its retail business and Apple’s app store.

Congress has previously blocked or reversed the expansion of large corporations. Although the separation of investment and commercial banks in the Glass-Steagall Act of 1933 has since been repealed, banks are still restricted from non-financial corporations under the 1956 Bank Holding Company Act. The Hepburn Act of 1906 withheld railroads from affiliated companies such as coal mining.

Absent congressional action sees technology critics turn to federal agencies. Google and Facebook are already struggling with antitrust lawsuits, while Amazon and Apple are under monopoly investigation. Democrats in the Federal Trade Commission will also investigate the agency’s authority to regulate unfair competition practices, although this authority is relatively untested and could face legal challenges.

All four companies have defended their competitive practices, saying they operate their products and services for the benefit of customers.

Google, Facebook and Apple did not immediately respond to requests for comment.

Write to Dana Mattioli at dana.mattioli@wsj.com and Ryan Tracy at ryan.tracy@wsj.com

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