Representing different political, business, and and economic sectors, experts outline consequences of this harmful legislation
Washington, D.C. (01/20/2022) – Ahead of today’s Senate Judiciary Committee’s markup of S. 2992, experts across the spectrum have voiced their concern that this legislation is harmful to American consumers and businesses, as well as America’s technological competitiveness and national security.
Just yesterday, the committee released the manager’s amendment to S. 2992, a measure that acknowledges all of the problems with the underlying bill but does nothing to address the issues:
- CCIA: Manager’s Amendment Shows AICOA Not Ready for Prime Time
- “The scattershot nature of the manager’s amendment underscores that the bill is not ready for prime time. The amendment leaves the bill even more overreaching in its breadth and scope than the underlying text.”
- Chamber of Progress CEO Adam Kovacevich tweeted:
- “HOT OFF THE PRESSES: Before tmrw’s Senate big tech antitrust markup, @SenAmyKlobuchar and @ChuckGrassley have a draft manager’s amdt out. Their changes both acknowledge the negative consumer impacts of the bill…AND don’t actually do anything meaningful to fix them”
- Progressive Policy Institute, Last Minute Changes to Klobuchar’s Anti-Tech Bill Do Nothing to East Harms to Consumer
- “While the amendment makes clear the bill’s sponsors are cognizant of the shortcomings associated with the legislation, it is functionally devoid of the changes necessary to prevent the harm the bill currently poses to American consumers. The result is a bill which puts aside the objective of consumer welfare and threatens the way in which both users and businesses utilize integrated online services.”
- ACT, The App Association, AICOA Remains a Disaster for Security and Privacy
- “It is unlikely the Senate Judiciary Committee can amend its way out of the security and privacy problems S. 2992 presents. The bill’s prohibitions are fundamentally in tension with privacy and security measures. The better bet is for Congress to focus its tech efforts on enacting a set of strong federal privacy requirements and avoid [a] potentially disastrous scenario for small business and consumers alike.”
- NetChoice, The American Innovation and Choice Online Act Manager’s Amendment Still Fails The Test
- “NetChoice agrees with Sens. Klobuchar and Grassley that S. 2992 needs substantial work. But their proposed changes don’t fix the bill and introduce new risks for American consumers. Rather than rush the process, the Senate Judiciary Committee should insist on a deliberate, methodical approach that gives security experts, economists, and interested Americans an opportunity to discuss the bill’s language and unintended consequences.”
- Information Technology and Innovation Foundation, Open Letter to Sens. Durbin, Grassley, Klobuchar, and Lee Regarding the American Innovation and Choice Online Act (S.2992)
- “In short, the bill takes a precautionary approach to innovative companies and innovative practices in the age of a fierce race for global innovation leadership. It is thus the wrong approach at the wrong time. Manager’s amendments aimed at potentially including Chinese platforms within the bill’s remit will fail to minimize the numerous harms that the bill intrinsically generates. Amendments will fail to stop offering Chinese app developers access to U.S. platforms—such access that this bill generously and dangerously provides them.”
A wide range of experts agree the legislation is largely problematic and has wide-ranging, unintended consequences for our nation’s security as well as consumers’ experience and data security.
- American Enterprise Institute’s Klon Kitchen and NSI’s Jamil Jaffer, The American Innovation Online Act Is A Mistake: The bill could seriously harm American cyber and national security
- “Going after our technology companies, particularly a targeted shot at certain big ones, sends the wrong message to startups and investors alike; it tells them that if you are innovative enough to be successful and grow significantly larger, you may be targeted for different treatment. That is simply not the approach we’ve taken as a nation to concerns about competition.”
- “China won’t play by these rules. Foreign tech companies will not be bound by these rules and so, if passed, S.2992 will hamstring American companies while leaving global competitors with greater agility. This bill is about more than a few U.S. tech companies being brought down a peg; it’s about us voluntarily ceding critical technological and economic advantage to countries like China at a time when leading in key technologies and tech markets is critical for our nation’s long-term thriving.”
- Grover Norquist, Americans for Tax Reform, ATR Releases Letter to Senate Judiciary on Klobuchar Antitrust Bill
- “S. 2992 shifts antitrust law away from the long-held consumer welfare standard, which protects consumers from harm, toward a European-style approach that protects individual competitors in a given market.”
- Wayne Brough, R Street Institute, American Innovation & Choice Online Act does little for innovation or choice
- “For almost 50 years… antitrust laws applied generally to all businesses with the potential for anticompetitive behavior, with such claims evaluated through an examination of the facts to assess the economic impact of the alleged misconduct. AICOA dispenses with this approach in favor of mandated restrictions on the largest tech companies in the United States. There is no empirical analysis of consumer harm nor any assessment of whether the companies are acting in a way that is pro-consumer or economically beneficial; instead, the legislation imposes by fiat a new set of rules on one of the most dynamic sectors of the U.S. economy.”
- Progressive Policy Institute, The American Innovation and Choice Online Act Would Likely Harm Consumers
- “Far beyond its stated goals, the Bill could end up harming consumers by breaking the products and services that they have come to greatly value and depend on.”
- U.S. Chamber of Commerce, AICOA ‘Will Raise Prices, Reduce Choices for American Families, Limit Opportunities for Small Businesses, and Harm Our Economy’
- “This bill is the definition of the government picking winners and losers in the marketplace, arbitrarily subjecting certain companies to one set of rules and everyone else, including their competitors, to a separate set. It gives federal agencies, including the Federal Trade Commission, which is already engaged in extensive overreach, the power to micromanage a large sector of the economy. In the future, the government will decide whether a company can innovate, lower prices, or offer free shipping and other services. And whether such vigorous competition is ‘unfair.”
- United States Hispanic Chamber of Commerce, Letter RE: Upcoming Technology and Social Media Related Legislation
- “We urge you to carefully consider the unintended consequences that any technology related legislation could have on the communities that depend on these channels to keep their businesses open and afloat. We believe that these consequences could disproportionately harm small and minority-owned businesses as we have adopted these technologies at a far greater rate than our non-Hispanic counterparts.”
- Aurelien Portuese, Information Technology and Innovation Foundation, Is Congress Committed to Making American Consumers’ Lives Costlier?
- “The Klobuchar-Grassley bill and the Cotton-Klobuchar bill illustrate the bipartisan support in Congress to emulate Brussels’s techlash against a few large U.S. tech companies even if this emulation harms American consumers. This bipartisanship rests upon antitrust populism, not economic pragmatism: It cast stones on a few successful companies and does not serve broad economic interests as illustrated by the bipartisan infrastructure bill.”
- Citizens Against Government Waste letter to SJC in opposition to S. 2992
- “While the legislation appears to be aimed at the covered platforms, it would also adversely impact those who develop and sell products on the platforms.”
- TechNet Statement & Letter
- “Significant issues that have not been addressed in the legislation and manager’s amendment. First, the consumer conveniences many Americans rely on will be limited or eliminated if the current language is enacted. Second, it targetsAmerican companies without applying to competitors abroad, such as Huawei,Tencent, Baidu, and Alibaba, providing China-based companies with a clear advantage over their American counterparts as they pursue growth opportunities.This bill also allows foreign sellers to demand broad “interoperation” and “access” to an American company’s systems and data. This is especially troubling given reports that the Biden Administration is reviewing Alibaba’s cloud business to determine whether their method of storing U.S. data poses a risk to America’s national security. Finally, most notable are the unintended consequences and negative impacts on small businesses, especially as our country recovers from the COVID-19 pandemic and record inflation.”
- The Competitive Enterprise Institute, The American Innovation and Choice Online Act Would Regulate Away Consumer Benefits
- It’s hard to imagine how regulators could not see how these arrangements benefit consumers and instead read into them “anticompetitive” motives, but it’s impossible to enlighten them if bills continue to be pushed through closed-door markups and not subjected to open hearings. A staffer from co-sponsor Sen. Grassley (R-IO) told reporters, “If we make carveouts for all the pro-consumer features, then the bill will be useless.” Yikes!
- Americans for Prosperity: S. 2992 Letter of Opposition to the Committee.
- “Whether it is free shipping or displaying map results in searches or suggesting apps to consumers, this legislation would significantly hinder the ability of companies to engage in such behavior in the name of “competition”. The reality is that online marketplaces already offer consumers plenty of choices when it comes to selling goods and services. This legislation punishes companies for engaging in common business practices and being successful….This legislation would undermine the ability of entrepreneurs to engage in that innovation process while simultaneously harming the ability of successful American companies from competing in the global marketplace.”
- Sumantra Maitra, Center for the National Interest, “Why Congress Should Rethink Its Assault on Big Tech”
- “But in an era of great power competition, breaking up American tech, the single most powerful competitive advantage that we have over our rivals abroad, would be tantamount to waving a white flag of surrender to our adversaries abroad.”
- National Taxpayers Union, How the Senate Antitrust Bill Could Disrupt Your Daily Routine
- “Unfortunately, this anti-consumer bill is moving forward without a hearing to flush out how these changes would impact consumer technology and choice. If this legislation were to pass, it would hamper competition by forcing some of the most dynamic companies to donate software features to competitors, and put American companies in the untenable situation of risking steep financial penalties for offering free, consumer-friendly services.”
- American Action Forum, The Effect of Congressional Antitrust Legislation on Consumers
- “Rather than focus solely on the size of companies or propping up individual competitors to large firms, Congress should instead direct its attention to anticompetitive behavior with a clear eye toward consumer welfare.”
- Free Press, Provision in Senate Antitrust Bill Would Undermine the Fight Against Online Hate and Disinformation
- “While the Senate co-sponsors have made some changes to the version that emerged from the House — presumably to address the concerns we raised last summer — the language released yesterday still doesn’t resolve them. Free Press Action cannot support this bill unless this problematic provision is removed or is dramatically scaled back…This provision in the American Innovation and Choice Online Act takes a big step in the wrong direction when it comes to that last category of ills by potentially outlawing the tools the largest platforms use for removing and reducing the reach of hate speech and other harmful content.”
- ICLE, 10 Things the American Innovation and Choice Online Act Gets Wrong
- “The bill marks the culmination of misguided efforts to bring Big Tech to heel, regardless of the negative costs imposed upon consumers in the process. ICLE scholars have written about these developments in detail since the bill was introduced in October.”
Learn more here.