Hands off my Amazon deals: Grassley’s ‘Innovation and Choice Online Act’ means less innovation and choice

A  “Big Tech” antitrust bill sponsored by U.S. Sen. Chuck Grassley advanced in a Senate committee last week. It purports to nurture innovation and choice on the internet but likely would 
accomplish the opposite.

The American Innovation and Choice Online Act is meant to bar technology companies from “unfairly preferencing” or “unfairly limiting” certain products over others. Bipartisan sponsors say their goal is to limit the market power of a handful of tech giants.

“They behave as gatekeepers for other businesses to reach consumers. They determine what news story, product or website gets to be at the top of search results,” Grassley wrote in a Des Moines Register guest column in December.

Grassley says his bill sets “clear rules,” but detractors say the language is so broad and vague that its full effects are unclear. They warn of a potentially much worse internet.

If Josh Hawley and Rashida Tlaib agree on something, it’s probably a bad deal for the American people.

Imagine a world where a Google search for “restaurants” returns an uncurated list of links with no maps or reviews of the dining destinations. Imagine there is no AmazonBasics nor two-day shipping from small businesses in Amazon’s fulfillment program. Imagine you get a new smartphone with no pre-installed apps and the only places to download them are crawling with sketchy counterfeits of the ones you’re used to.

“Consumers’ phones might start resembling [2000s-era] virus-laden PCs under the bill,” scholars at the Progressive Policy Institute wrote in a recent report criticizing the legislation.

Beyond creating a worse online experience, Grassley’s proposal could end up hampering access to vital information. It might suppress the reach of reliable news stories or interfere with search engines’ practice of preferencing government-approved messages about COVID-19.

The cornerstone of U.S. antitrust law is the consumer welfare standard. It sets the focus of regulators and the courts on potential harms to consumers, like higher prices.

With social media and e-commerce companies, no one is arguing that prices are too high. To the contrary, tech critics’ concern is that the prices are too low, in many cases zero. Consumers are getting too good a deal, apparently.

The bill threatens penalties up to 15 percent of a company’s total revenue, not just its profits. That is a ridiculously steep fine that I figure was only put in the legislation because “gazillion dollars” wouldn’t pass legal muster.

The rules would only apply to companies with a high number of active users. It makes you think this isn’t really about consumer choice at all and is actually a vehicle for politicians in both parties to lash out at a small group of corporations they perceive as political enemies — namely Amazon, Facebook and Google. The bill would protect those companies’ smaller competitors, not consumers.

In a Congress that can’t seem to get anything done, tech regulations enjoy unusually broad bipartisan support. The American Innovation and Choice Online Act cleared the Senate Judiciary Committee last week with a 16-6 vote. It has more than a dozen sponsors from each party between the House and Senate versions.

If Josh Hawley and Rashida Tlaib agree on something, it’s probably a bad deal for the American people.

(319) 339-3156; adam.sullivan@thegazette.com

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