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Here’s why US Department of Justice wants Congress to pass antitrust bill prohibiting self-preferencing by Big Tech

The bill is meant to stop the likes of Amazon and Google from unfairly picking their own products as favourites.

“By confirming the illegality of behaviours that reduce incentives for smaller or newer firms to innovate and compete, the legislation would supplement the existing antitrust laws in preventing the largest digital companies from abusing and exploiting their dominant positions to the detriment of competition and the competitive process,” the US Department of Justice (DOJ) wrote in a letter dated March 28 in support of an antitrust bill that targets self-preferencing by major tech platforms like Amazon, Google, and Apple.

Earlier in February, the Senate Judiciary Committee voted 16-6 to pass the bill called the American Innovation and Choice Online Act. The Bill now awaits a full Senate vote, ahead of which the DOJ has expressed its support. “The Department is strongly supportive of these objectives and encourages both the Committee and Congress to work to finalize this legislation and pass it into law,” the DOJ said.

Congressman Ken Buck, who co-sponsored the bill, welcomed the support of the DOJ saying:

“The Department of Justice’s letter of support is a huge step forward for this legislation, and represents the pieces falling into place for wide-ranging reforms to America’s competition landscape to pass into law. Now it’s time for the full House to act on this bill to protect small business and ensure that the free market is working for everyone, not just Big Tech monopolies.”

What is the American Innovation and Choice Online Act?

First introduced on June 11, 2021, along with four other tech antitrust bills, the American Innovation and Choice Online Act is aimed at preventing dominant companies from unfairly preferencing their own products over 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.

Even though the Bill has cleared the Senate Committee, some lawmakers who voted to advance it have done so under the condition that it be reworked to account for privacy and consumer benefit, among other things, before the Senate floor vote.

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Why does the DOJ support the Bill?

  1. The numerous threats posed by dominant platforms: “The Department views the rise of dominant platforms as presenting a threat to open markets and competition, with risks for consumers, businesses, innovation, resiliency, global competitiveness, and our democracy. By controlling key arteries of the nation’s commerce and communications, such platforms can exercise outsized market power in our modern economy. Vesting the power to pick winners and losers across markets in a small number of corporations contravenes the foundations of our capitalist system, and given the increasing importance of these markets, the power of such platforms is likely to continue to grow unless checked. This puts at risk the nation’s economic progress and prosperity, ultimately threatening the economic liberty that undergirds our democracy,” the DOJ stated. (emphasis ours)
  2. The legislation will provide clarification on types of discriminatory conduct: “Enumerating discriminatory and self-preferencing conduct that Congress views as anti-competitive and therefore illegal would clarify the antitrust laws and supplement the available causes of action and legal frameworks to pursue that conduct,” the letter stated. “Doing so would enhance the ability of the Department of Justice (DOJ) and Federal Trade Commission (FTC) to challenge that conduct efficiently and effectively and better enable them to promote competition in digital markets,” the letter added.
  3. Will have a positive effect on dynamism in digital markets: The legislation has “the potential to have a positive effect on dynamism in digital markets going forward” and US’s “future global competitiveness depends on innovators and entrepreneurs having the ability to access markets free from dominant incumbents,” DOJ remarked. It will also “support the growth of new tech businesses adjacent to the platforms, which may ultimately pose a critically needed competitive check to the covered platforms themselves,” DOJ said.

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