House lawmakers are coming after Google, Apple, Amazon and Facebook with five new pieces of proposed regulation to increase competition in the digital marketplace.
The House Subcommittee on Antitrust, Commercial and Administrative Law released the five bipartisan bills Friday, which if successful would hold big tech companies accountable for alleged anti-competitive conduct. Antitrust subcommittee members drafted the bills following a 16-month investigation, which generated a report alleging big tech companies use their monopoly power to crush competition and innovation.
The bills aim to limit big tech companies' ability to favor their own products, which would be particularly harmful to companies like Apple and Amazon that own the marketplaces in which their products are sold. The bills would also prohibit acquisitions of competitive threats and increase funding to the Department of Justice and Federal Trade Commission to enforce antitrust laws.
"Right now, unregulated tech monopolies have too much power over our economy," Rep. David Cicilline (D-R.I.), antitrust subcommittee chairman, 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."
Strengthening control over digital marketplaces
The five bills focus on different areas of antitrust reform.
The "American Innovation and Choice Online Act" focuses on ensuring dominant platform operators like the Amazon Marketplace or Apple App Store can't favor their own products over products their competitors offer on their platforms.
The "Ending Platform Monopolies Act," sponsored by Rep. Pramila Jayapal (D-Wash.) and co-sponsored by Rep. Lance Gooden (R-Texas), would prohibit a platform with 50 million active users and net annual sales greater than $600 billion from owning a business that represents a conflict of interest.
The "Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act," sponsored by Rep. Mary Gay Scanlon (D-Pa.) and co-sponsored by Rep. Burgess Owens (R-Utah), would mandate data interoperability and allow consumers to easily transfer data to competing businesses through third-party APIs.
The "Platform Competition and Opportunity Act," sponsored by Rep. Hakeem Jeffries (D-N.Y.) and co-sponsored by subcommittee ranking member Rep. Ken Buck (R-Colo.), would prohibit dominant platforms from acquiring competitive threats, while the "Merger Filing Fee Modernization Act," sponsored by Rep. Joe Neguse (D-Colo.) and co-sponsored by Rep. Victoria Spartz (R-Ind.), increases fees for merger filings for the first time in two decades to provide the Department of Justice and FTC more funding to enforce antitrust laws.
Analysts weigh in on proposed legislation
Analysts said the proposed legislation will likely do more harm than good and comes too late in the game to make much of a dent.
Ray Wang, president at consulting firm Constellation Research, said lawmakers should keep digital giants in check. However, as companies like Amazon, Apple, Facebook and Google get bigger, they become increasingly "irresistible targets."
"This will only increase the likelihood that regulation will be taken too far at [consumers'] expense," Wang said.
Making it harder for tech giants to buy other companies by requiring they prove their acquisition targets aren't potential competition, for example, could slow down M&A activity, Wang said.
Sucharita Kodali, vice president and principal analyst at Forrester Research, said the venture capital community will likely fight this legislation "tooth and nail," since valuations are based in part on their likelihood for acquisition.
"If this gives other companies a chance to be competitive, this will be good," Kodali said. "If this reduces innovation long-term, then I think it will be reversed."
While the proposed bills try to level the competitive playing field, they don't address what Kodali considers to be some of the worst abuses of big tech, such as Section 230, which provides immunity for companies like Facebook from third-party content.
Alan Pelz-SharpeFounder, Deep Analysis
"None of these laws force accountability for false or damaging products, services or words on their platforms," she said.
Alan Pelz-Sharpe, founder of consulting firm Deep Analysis, said the proposed legislation is long overdue, but the delay in regulating companies like Apple and Google is also part of the problem. Had the bills been enacted a decade ago, they could've had more success in stopping companies like these from becoming the behemoths they are today.
Today, tech giants run on a global scale "few can imagine," and they're able to fight back against legislators in a manner "previously unimaginable," Pelz-Sharpe said, which makes them daunting opponents.
"No doubt, some of this legislation will move forward, and some of it may be enacted," he said. "Life will be a little more difficult for the likes of Facebook and Google moving forward. It will be a thorn in their sides. But I doubt it will seriously impact their businesses."
Next, the bills will be taken up by House Judiciary Committee, where they will have to be approved before being introduced to the full House. If approved, the bills would then need Senate approval before heading to the White House where they could be signed into law.
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington Star-News and a crime and education reporter at the Wabash Plain Dealer.