The Senate Judiciary Committee marked up The American Innovation and Choice Online Act (S. 2992) last week, a bill co-sponsored by Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA). If passed into law, the proposal would hurt U.S. consumers by outlawing popular services from large technology companies and concentrate even more power at the Federal Trade Commission (FTC).
Director of CEI’s Center for Technology and Innovation Jessica Melugin said:
“This legislation will hurt U.S. consumers and concentrate even more power at the Federal Trade Commission. Handicapping market leaders by denying their ability to offer services, combinations and suggestions that their users enjoy and value isn’t the point of U.S. antitrust law. Even co-sponsor Grassley’s office admitted that consumers will be harmed when they told press, ‘If we make carveouts for all the pro-consumer features, then the bill will be useless.’ That should be a big red flag for Senators who don’t want to incur the wrath of angered constituents.
“Populist Republicans, who have beef with Big Tech for other reasons, should resist handing more authority to today’s regulatory bureaucracy. These lawmakers are sorely mistaken if they think the Lina Kahn’s FTC will champion conservative causes. This legislation will do nothing to address content moderation concerns, but it will hurt consumers more in need than ever of savings and convenience online.”
Senior fellow Ryan Young said:
“Sen. Klobuchar’s American Innovation and Choice Online Act relies on a bizarre assumption: that commerce online is somehow fundamentally different from commerce done in person, or over the phone, or through the mail. This is a false distinction. Commerce is commerce. Buyers buy, sellers sell, and that’s it. Whether they do it in person or online is mostly a matter of convenience.
“It’s 2022, and nearly every business these days mixes physical and online commerce. It isn’t special, and does not require separate legislation. Brick-and-mortar stores like Walmart and Target are expanding their online delivery options and opening marketplaces for third-party sellers. Online retailer Amazon long ago bought Whole Foods grocery stores, and is opening retail stores across the country.
“For decades, grocery stores and retailers have sold self-branded goods and given them preferential treatment like subsidized marketing and prominent shelf space. Costco has its Kirkland brand, Walmart has its Great Value brand, and every grocery chain has its own store brand. Despite rampant self-preferencing, grocery and retail remain competitive markets. It is no different when a company like Amazon does the same thing, but online.
“The American Innovation and Choice Online Act would harm consumers by raising prices, reducing selection, and adding hassle to everything from buying groceries to getting directions. And it would do this during a pandemic, and while families are dealing with the highest inflation in 40 years. This bill would do little but chase after online ghosts and earthly political ambitions—and will likely fail at these as well.”