House lawmakers proposed a series of bipartisan legislation aimed at overpowering Big Tech, including a bill seeking to make Amazon.
com Inc. and other large companies are effectively split into two companies or throw away their private label products.
If bills become law – a perspective that still faces significant obstacles – they could significantly change America’s most valued businesses and transform an industry that has extended its impact to almost every aspect of work and life.
One of the proposed measures entitled the Ending Platform Monopolies Act seeks to require structural separation of Amazon and other large technology companies in order to break up their business. It would make it illegal for a covered online platform to own a business that “uses the covered platform for the sale or delivery of products or services”
A separate bill takes a different approach to targeting platform self-preference. It would prevent them from behaving as “distributing the covered operator’s own products, services or business areas over another business user”, or as excluding or disadvantaging other companies.
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.
Each of the bills has both Republicans and Democrats signed, and more are expected to attend in the coming days, congressional aides said. A total of seven Republicans back the bills, with another group of three signing each measure, according to a person familiar with the situation.
“Unregulated technological monopolies have too much power over our economy,” the rep said. David Cicilline (D., RI), the top Democrat on the Antitrust Subcommittee. “They are in a unique position to pick winners and losers, destroy small businesses, raise consumer prices and put people out of work. Our agenda will create a level playing field. ”
Rep. Ken Buck (R., Colonel), the top Republican on the panel, said he supports the law because it “breaks Big Tech’s monopoly power to control what Americans see and say online, and promotes an online market that encourages innovation.” . ”
The four companies did not immediately comment on the proposed legislation. All four companies have defended their competitive practices, saying they operate their products and services for the benefit of customers.
The proposed bills are among five bills announced Friday that aim to curb the dominance of technology giants.
A third bill would force online platforms to make their services interoperable with competitors’, a provision that could force different social networks to allow their users to communicate or allow e-commerce sellers to export their customer reviews from one place to another. according to a summary provided by legislators.
A fourth bill targets mergers, making it illegal for a major online platform to acquire competitors or potential competitors. The bill would have prevented only “a small percentage of all technology sector agreements” over the past decade, the summary said.
Legislators also introduced a bill to raise merger filing fees to more than $ 1 billion. And lower them for transactions under $ 500,000. That would generate an estimated $ 135 million for monopoly enforcement agencies in the first year, the summary said. Similar legislation was recently passed by the Senate.
Four of the five bills are narrowly focused 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 50 million active monthly users or 100,000 monthly active business users, and must be a “critical trading partner” that has ability to restrict or impede another company’s access to customers or services.
Only four companies – Amazon, Apple, Facebook and Google – currently meet the parameters stated in the bills, according to the person familiar with the matter. These are the same companies that Congress investigated as part of its probe into Big Tech. Walmart Inc.,
for example, operates an online marketplace and has private label products, but has only a market value of 392 billion. $, so it would not be subject to the restrictions.
While the bills do not mention any companies, they do reflect issues raised by Big Tech critics. The self-preferences bill blocks actions that “restrict or prevent business users from communicating … to covered platform users to facilitate business transactions,” citing a common complaint from Amazon’s third-party sellers about restrictions on their ability to communicate with customers.
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.
Some lawmakers have 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.”
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.”
If the Monopoly Closure Bill is passed, Amazon could 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.
The Ending Platform Monopolies Act has been compared to the banking sector’s Glass-Steagall Act, which separates commercial and investment banking.
The new bill would effectively mean that “a search engine could not own a video service that it has incentives to favor in the search results,” the summary from lawmakers said in a thinly veiled reference to Google’s YouTube.
The bill aimed at self-preference could affect how Amazon runs its retail business and how Apple runs its 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.
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