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US introduces five bipartisan bills aimed at breaking up Big Tech

We missed this earlier: On June 11, US lawmakers debuted five bipartisan draft bills that are aimed at curbing the power of tech giants like Apple, Google, Facebook, and Amazon. These bills are the product of the 16-month long investigation by the House Judiciary Committee that found Big Tech companies enjoy monopoly power. “The legislation represents the most comprehensive effort to reform century-old antitrust laws,” CNBC reported.

“Unregulated tech monopolies have too much power over our economy. They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us.” — Rep. David Cicilline said.

The bills still need to be voted favourably by the House and approved by the Senate before they can be signed into law by the president.

What are the five bills?

1. The American Innovation and Choice Online Act (link)

This bill is aimed at preventing dominant companies from unfairly disadvantaging rivals. For example, it will prevent Amazon from using data collected on its e-commerce platform to give its own private label products an advantage over those of third-party sellers. Google will also be prevented from self-preferencing its services such as YouTube and Maps in search results and Apple will be prevented from pre-installing its own apps on devices it sells. Furthermore, Apple and Android are prohibited from setting policies for their app stores that make app developers lose business and revenue including policies that preventing developers from telling users that they can pay for subscriptions on the web to avoid app store commissions. Significant penalties will be levied on companies that fail to comply— 30 percent of the average daily revenue of the offending line of business.

2. The Ending Platform Monopolies Act (link)

This bill, which targets many of the same issues as the American Innovation and Choice Online Act, is aimed at preventing companies from owning a platform and offering services on it that pose a conflict of interest by competing with third parties on the platform. It specifically targets companies platform with at least 50 million monthly active US users and a market cap of over $600 billion. It directly targets platforms like Amazon which not only run a marketplace for other sellers but also have their own inventory and private labels. It also targets Apple and Google who, in addition to running app stores for developers, sell their own competing apps and services. The Justice Department will be empowered to break up such companies by forcing them to sell off parts of their business.

3. The Platform Competition and Opportunity Act (link)

This bill will prevent dominant online platforms from buying companies they perceive as competitive threats. This is to prevent Big Tech companies from buying up rivals they see to be nascent threats, such as Facebook’s 2012 Instagram acquisition. In order for such deals to go through, the platforms must prove that they will not hurt competition, shifting the burden of proof away from regulators and to the companies.

4. The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act (link)

This bill will make it easier for consumers to port data between platforms by enacting data interoperability standards. It is expected to reduce the ability of platforms like Apple to lock in customers to their ecosystem. This will allow users to seamlessly move between platforms similar to how customers can port numbers between network carriers.

5. The Merger Filing Fee Modernization Act (link)

This bill calls for an increase in the fees charged for mergers and the budget allocated to antitrust agencies like the Federal Trade Commission and Anti Trust division of the Justice Department. It is aimed at giving competition authorities more resources to investigate antitrust behaviour. A companion bill to this has already passed the Senate.

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