What the new antitrust legislation could mean for Big Tech… and you

Democratic and Republican lawmakers have banded together to take on Big Tech. A group of representatives introduced a set of five bipartisan bills designed to rein in the competitive power of Amazon, Apple, Facebook, Google and other tech giants.

If passed, the legislation would mark the most meaningful change to antitrust laws in decades. The bills follow a nearly year-and-a-half-long investigation by the House of Representatives’ antitrust subcommittee, which focused on competition in the digital marketplace. 

Read more: How new antitrust bills could hit Amazon, Apple, Facebook and Google

Rep. David N. Cicilline, a Rhode Island Democrat and chairman of the House Antitrust Subcommittee, said the bills would “level the playing field” and ensure tech companies are held to the same rules as everyone else.

“Right now, unregulated tech monopolies have too much power over our economy,” Cicilline said in a press release. “They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work.”

Here’s what the bills are and how they might affect both the tech giants and you:

What are these bills?

• The American Innovation and Choice Online Act would prohibit “discriminatory conduct” by tech giants. That means the companies would no longer be able to give their own products and services preference over rivals’ products and services. It also would prohibit other discriminatory behavior, such as cutting off a competitor from services, and ban tech giants from using data collected from companies using their platforms to develop competing products.
• The Platform Competition and Opportunity Act would bar the use of acquisitions to crush competitive threats or to expand their market power. If passed, the bill would shift the burden of proof in merger cases to the big tech companies, making it their responsibility to prove acquisitions are lawful rather than the government’s responsibility to prove a merger would be harmful. The change could slow the rate at which larger companies gobble up competitors. 
• The Ending Platform Monopolies Act would restrain Big Tech companies from using their power across multiple types of business to give themselves unfair advantages. The bill targets platforms with at least 50 million monthly active US users and market capitalizations of more than $600 billion to own or operate another line of business that creates a conflict of interest. Those conflicts of interest would include any incentive for a company to favor its services over a competitor’s or an incentive to disadvantage a potential competitor. Lawmakers have previously indicated that Amazon, whose branded products compete with those of sellers on its marketplace, and Apple, which builds apps that compete with third-party apps sold in its app store, engage in this practice. 
• The Augmenting Compatibility and Competition by Enabling Service Switching Act, or Access Act, would make it easier for people to take their personal information from one tech platform to another. A similar Senate bill was introduced last year. 
• The Merger Filing Fee Modernization Act would raise filing fees providing the government funds to pursue antitrust actions. The money would go to the country’s top antitrust enforcers, the Federal Trade Commission and the Department of Justice. 

What would happen if they passed?

Passing the bills would mark a historic overhaul of antitrust law, which was established more than a 100 years ago to rein in the unchecked power of railroad, oil and steel magnates. 

The new laws would make it easier for the government to break up dominant companies. It could also prevent these companies from snuffing out competition through preemptive acquisitions. And it could curtail the tech giants from entering different businesses where they’d be able to use their market power to crush smaller competitors. 

Seems like they’re targeted at Amazon, Apple, Google and Facebook. How would the bills affect those companies?

You’re not wrong. Rep. Ken Buck, a Colorado Republican who is the ranking member of the House antitrust subcommittee, named the Big Four in a statement accompanying the release of the bills. 

“Apple, Amazon, Facebook, and Google have prioritized power over innovation and harmed American businesses and consumers in the process,” Buck said in a statement. “These companies have maintained monopoly power in the online marketplace by using a variety of anticompetitive behaviors to stifle competition.”

The four companies, among the most powerful in the world, have been in the crosshairs of antitrust regulators and lawmakers for more than two years. 

Facebook, the world’s largest social network, sports a user base roughly the size of the world’s two most populous countries — China and India — combined. Amazon controls 38% of US online sales and has data on other retailers using its giant platform. Apple’s App Store is a critically important platform for software developers looking to resonate with Apple’s audience of iPhone and iPad customers. Google processes about 90% of all web searches globally. 

Combined, the four companies are worth about $6 trillion. 

If the legislation becomes law, it could dramatically affect how these companies do business. For instance, the Ending Platform Monopolies Act would make it illegal for Amazon, which operates a major e-commerce marketplace, to sell its own branded products. It might also mean that Google would be barred from highlighting YouTube videos on its search engine. 

The American Innovation and Choice Online Act could force Apple to open up its app store and allow consumers to more easily take their apps and information to a competing platform. 

Have the companies said anything about the bills? 

They’ve been tight-lipped, at least in public. But their representatives haven’t.

Adam Kovacevich, CEO of the Chamber of Progress, a group sponsored by Amazon, Facebook, Google and other tech companies, argued against some of the new bills even before they were announced. Consumers, he wrote, would lose more than a dozen popular features, including free shipping for some products through Amazon Prime. Google Maps, Apple’s homegrown apps and Facebook’s easy cross-posting to Instagram could also suffer, he wrote. 

“Giving antitrust enforcers more funding and encouraging data portability are relatively uncontroversial ideas,” Kovacevich said in the post. “But banning conveniences like Amazon Basics brand batteries, Apple’s Find my Phone tool, or Google Maps appearing in Google search results are ideas that would spark a consumer backlash.”

Has anyone tried an antitrust lawsuit against these companies? 

All four of the tech giants face major antitrust battles. Google is the target of three major antitrust lawsuits, including a landmark case filed by the US Department of Justice and another complaint from a bipartisan coalition of states. Facebook faces lawsuits from the Federal Trade Commission and a group of state attorneys general. Amazon has been sued by the attorney general of Washington, DC, for alleged price fixing. Apple and Google have been sued by the maker of the popular game Fortnite for their app store policies.

What led up to all of this? 

In October, after a 16-month investigation, the House Judiciary Committee published a scathing 449-page report that concluded Amazon, Apple, Facebook and Google have transformed into monopoly powerhouses. 

“Companies that were once scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the report reads.

Lawmakers accused Facebook, Amazon, Google and Apple of abusing “monopoly power.” The report called for restructuring and several other changes to constrain the companies. Some of the recommendations in the report, such as making it tougher for tech giants to buy up smaller companies and instituting “nondiscrimination requirements” to stop platforms from prioritizing their own products over those of rivals, have made it into the legislation.

What comes next?

The bills still have to be approved by the House Judiciary Committee before making their way for a vote before the full House of Representatives. After that, they’d head to the Senate. If the Senate approves them, President Joe Biden would have to sign them.

We’re a long way from that point. The tech companies and their armies of lobbyists will undoubtedly fight the legislation. Expect it to be a heated battle.