Washington, D.C. (02/17/2022) – The American Innovation and Choice Online Act (AICOA) will have far-reaching, negative impacts on the products American consumers love, including the features that make their lives easier every day and the privacy protections that are currently in place to help keep them safe.
“Whether intended or not, AICOA will have significant and wide-ranging consequences for consumers. From jeopardizing the safety and privacy of American consumers to forcing companies to share consumers data with third parties – even foreign firms – to stripping Americans of the conveniences they use every day, this legislation would break the products and services so many people have come to love,” said Chandler Smith Costello, a spokeswoman for the Don’t Break What Works Campaign.
What U.S. senators and experts are saying:
U.S. Sen. Alex Padilla:
“I’m not yet convinced that this bill as currently drafted will actually provide the net benefit to consumers that we’re seeking.”
“Why distinguish between Amazon Marketplace and Walmart Marketplace if the practices are comparable? A 10 billion dollar company vs a 100 billion dollar company – they both have economic significance. If the concern is that self-preferencing – the activity, the practice – is bad, when these few companies do it because of their dominance, then isn’t it also bad when other large firms beyond these five adopt these same practices?”
“I respect that many consumers like the convenience of self- preferencing that enables them to type something into a search engine and receive answers to their queries right then and there without having to go through additional clicks or additional links. This is now a staple feature across search engines today. Now this may be a simple example, but a lot of what has powered technological innovation over the last couple of decades has been the power and convenience of integrated services working together to the consumer’s benefit. But given the broad language in this bill, here’s a question: Is this committee willing to trust regulators and courts to crack down on harmful self- preferencing practices while allowing activity that benefits consumers?”
U.S. Sen. Mike Lee:
“I believe strongly in the adage that we’ve gotta first do no harm, and in order to determine that we are doing no harm we must understand the legislation.This thing has not received the airing that it needs.”
“The bill results, as drafted, in the removal of popular products and services that have benefited consumers.”
“How will the interoperability requirements impact cybersecurity and privacy? Will judges interpret the bill to protect consumers – or individual competitors? It’s an important question given that U.S. antitrust law, our competition policies in this country, have always focused, to our great benefit, on protecting competition itself. Protecting competition, with an eye towards the consumer. The minute we start focusing on competitors rather than competition and consumers, is the minute we could really end up with a very different product and we really have to be careful about doing that.”
Keith Kratch, Former Under Secretary of State for Economic Growth, Energy, and the Environment:
“The first thing we got to make sure is that we don’t handcuff our businesses. And I know there is some legislation that says things like ‘software companies have to always open up their interfaces’. That means the Chinese can always get the data. Or that you can’t make an acquisition. We have to be careful.”
Wayne Brough, R Street Institute:
“AICOA’s restrictions lower the overall level of competition in the marketplace, leaving consumers worse off while reducing innovation. The legislation assumes that rival companies will step into the breach and fill new niches as markets evolve, but it must be remembered that the research and development (R&D) budgets of the covered platforms are significantly larger than the budgets of smaller firms. Restricting the ability of covered platforms to invest in changes to their products or in other lines of business on their platforms will have an adverse effect on innovation. At the same time, rules that fragment the existing online ecosystem can generate higher costs and reduce consumer welfare.”
Graham DuFault, The App Association:
“Limiting the universe of bad actors subject to removal to those that appear on lists ‘maintained by the Federal Government’ is laughably inadequate and irresponsible cybersecurity policy. The new language only protects token cybersecurity activity, shielding platforms if they rely on the lists of prohibited persons and businesses from the federal government. Cybercriminals adapt quickly and take a variety of measures to prevent detection. Requiring platforms to wait for threat identification and addition to a federal government list gives criminals an enviable new advantage and would expose consumers to a fresh wave of new threats that mobile devices can easily avoid at present.”
Grover Norquist, Americans for Tax Reform:
“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. This legislation bans companies over a government- determined size from selling or providing private-label products on their own platforms, a practice beneficial to consumers but negatively branded as ‘self-preferencing.'”
Malena Daley, Progressive Policy Institute:
“The disregard for the bill’s implications regarding consumer welfare raises an important question: Who is antitrust legislation meant to benefit? In theory, promotion of competition on online platforms may lower prices and increase choice, but the line of thinking promoted by this bill turns a blind eye to the reality of how users and businesses engage with internet services. For consumers, integrated online services are a valued feature of the products provided by platforms. By taking this integration away or requiring that it be offered at cost, Americans who depend on these services will be left worse off with the passage of this bill.”
Matt Schruers, Computers & Communications Industry Association:
“This bill still disregards the principles that have governed the U.S. market economy, and led to a successful tech industry. It tosses out previous consumer-focused considerations and instead jeopardizes popular products and services.” Even as this legislation is being rushed to a markup, more experts are questioning the wisdom in hamstringing a few U.S. companies, forcing them to share data and other information with foreign rivals. That may work as a political strategy, but it is not a sound economic or security strategy.”
Learn more about how AICOA disrupts American innovation here.
The Don’t Break What Works campaign is powered by the Computer and Communications Industry Association (CCIA). Learn more here.