Bipartisan ‘Innovation and Choice Online Act’ Would Harm Innovation and Choice

Today, the Senate Judiciary Committee is set to consider the American Innovation and Choice Online Act (AICOA). This bill was sponsored by Senators. Amy Klobuchar (D–Minn.) and Chuck Grassley (R–Iowa), seeks to criminalize “certain discriminatory conduct” by some online platforms. However, in practice the bill could harm consumers by making simple services harder to use.

The AICOA would make it unlawful for any internet service to “materially restrict or impede the capacity of a business user to access or interoperate…in a manner that would materially harm competition” on the service. Google Maps search results would not appear automatically under the new legislation. iPhones cannot also come pre-installed with Apple programs. Amazon could not offer Prime Shipping for two days or sell the popular AmazonBasics consumer products at a lower price.

This bill won’t have the expected effects on choice and innovation, but it seems highly likely that it will do exactly the opposite. This week the Progressive Policy Institute, a center-left think tank stated that AICOA would cause “irreparable harm” to many of the products and services millions of Americans depend on each day. The bill will also reduce innovation as businesses are required to obtain regulatory approval for every product they create.

This bill applies only to covered platforms. It defines “covered platform” as an online platform that has more than 50,000,000 active users per month or more than $550billion in market capitalization. These criteria would apply only to certain companies such as Amazon, Google, Facebook and Amazon. However, it seems that the bill is narrowly tailored so that only certain companies are covered. An amendment, which was introduced earlier in the week, included an additional clause. qualifierThese platforms were targeted for more than one billion monthly active users All over the world. This clause seems to target TikTok specifically. reachedThat was the last milestone of 2008.

Klobuchar published a letter this week that included more than 35 companies from the tech industry that signed it. This list contained big names in the industry, including Yelp. In the letter it stated that the bill would “target self-preferencing to aid restore competition in digital marketplaces and remove obstacles for consumers to select the services they wish to.”

It isn’t clear, however that customers don’t “choose” the services they desire. Retailers have been selling their versions of brand-name products for many decades, without the government being involved. Apple’s iMessage works great and I don’t use it because it comes pre-loaded onto my phone. I would not be better served as a consumer if I were forced to download it separately—or worse yet, if I had to pay for it. Apple and Android smartphones account for roughly 50/50 of smartphone users. Yet, Google Maps is the most widely used navigation app. It comes pre-installed in Android phones but not Apple.

However, some of AICOA’s supporters feel these practices unfairly when used by tech companies. A version of AICOA was introduced in the House last year. Rep. Ken Buck (R–Colo.Co-sponsor, Ken Buck (R-Colo.), complained that Amazon permits merchants to list products and “then they start producing the product on their behalf, under their own brand, for less.” That’s unfair. “What part of unfair are you missing?”

Buck’s emphasis on fairness makes sense, since it isn’t clear that the ultimate goal is consumer benefit. A Grassley employee responded to the calls for exempt language on certain services. Washington ExaminerThe bill would be worthless if we made carveouts to cover all pro-consumer aspects.

Exactly. The only thing that is worse than an ineffective bill, however, is the one we currently have: an active harmful bill, written with fairness in mind.