On Thursday, a powerful House panel approved a broad set of proposals aimed at weakening Big Tech. It enacted a slew of new regulations that place new obligations on top digital platforms, prohibiting them from abusing gatekeeper power and, in some cases, allowing for new fines and breakups.
The House Judiciary Committee sent six bills to the House floor in a marathon two-day session that lasted nearly 29 hours and resulted in the most significant change to US antitrust law in decades.
The most stringent bills outlaw what committee members claim are Big Tech’s most blatantly anti-competitive tactics.
Amazon (AMZN) would be prohibited from owning the same e-commerce platform that it competes with independent sellers under those proposals. Facebook (FB) may not be able to acquire startups that it sees as posing a future competitive threat. Google would be prohibited from favoring YouTube over other video competitors in search results. In addition, Apple (AAPL) could be forced to allow third-party app stores on iOS. The proposed policies strike at the very core of some of Big Tech’s most important business models.
The bills would make it illegal for large tech companies to unfairly promote their own products and services on platforms they own, such as when Google promotes YouTube videos, or to use their control of multiple platforms to harm other businesses that rely on those platforms, as some claim Amazon does with sellers.
“These reforms would be the most significant in the US competition law system since Hart-Scott-Rodino, which was 45 years ago in 1976,” said William Kovacic, former chairman of the Federal Trade Commission. Hart-Scott-Rodino was a Ford-era law requiring public transparency for mergers and acquisitions.
The bills do not name the companies, though some lawmakers expressed interest in doing so on Thursday as a way to limit the legislation’s intended scope. Instead, the bills lay out a broad definition of tech behemoths that antitrust regulators will be expected to use when determining which companies are subject to the laws. This includes market capitalization and monthly user limits.
If the Federal Trade Commission or the Department of Justice find that a covered company has abused its gatekeeper power, the agencies could sue for fines or a breakup, according to the bills.
The outcomes could have a significant impact on the internet as we know it.
The House vote comes as the tech industry is under increasing scrutiny from policymakers and regulators around the world. Multiple antitrust lawsuits have been filed against Google by federal and state officials, alleging wrongdoing in online search and advertising. Facebook has been sued by state and federal officials for what critics have dubbed a “killer acquisition” strategy. Apple went to trial this spring to defend itself against claims made by Epic Games, the creator of “Fortnite,” that Apple’s app store monopolizes app developers’ access to iPhones. As a result of its acquisition of media behemoth MGM, Amazon is facing renewed antitrust scrutiny.
In recent months, European officials have launched a flurry of investigations into Apple, Google, and Amazon’s business practices. This month, Europe’s top court ruled that data privacy regulators can hold digital platforms like Facebook accountable across the continent, not just those in the same jurisdiction as their headquarters.
The House bills represent the most comprehensive effort on this side of the Atlantic to develop a national set of rules for digital platforms.
“Today, we have sent a clear message,” said Rep. David Cicilline, who led the charge on a 16-month investigation of the tech industry last year that culminated in the legislation. “The United States will no longer let other countries lead the fight against unregulated monopoly power. America is ready to hold Big Tech accountable so we can build a stronger online economy.”
Prior to Wednesday’s markup, the tech industry launched an all-out assault to thwart the US bills. Congress was moving too quickly, according to its trade groups and lobbyists, and the bills could have unintended consequences for consumers.
Amazon said that if it had to choose between selling retail goods on its own and operating an e-commerce marketplace for everyone, it would choose the former, which would result in a loss of business for half a million sellers who use its platform. Allowing iOS users to download apps from anywhere could lead to security and privacy issues, according to Apple.