Grassley and Buck Mischaracterize Economic Impacts of AICOA

Various Republicans have come out in support of Senator Amy Klobuchar’s (D-Minn.) radical antitrust bill, the American Innovation and Choice Online Act, in large part due to their justified concerns about Big Tech censorship. However, their flawed arguments in support of the legislation indicates the problems with their plan to crack down on Big Tech through antitrust law.

Rep. Ken Buck (R-Colo.), for example, said in a statement to the Washington Examiner that, “A monopoly over information in a democracy is a monopoly on power, and this bill is a necessary first step to address that issue.” This statement indicates a fundamental misunderstanding with the actual impact of the legislation. The only social media company that would currently be affected by this legislation is Facebook.

Photo Credit: Gage Skidmore from Peoria, AZ, United States of America, CC BY-SA 2.0, via Wikimedia Commons

As the Wall Street Journal Editorial Board points out, Facebook does not engage in nearly as much “self-preferencing” of its own services as the other Big Tech companies that the bill targets, such as Apple and Amazon. Neither of these companies are the primary forces involved in the censorship of conservatives or control of information. They are not even social media companies. This bill does not focus whatsoever on addressing any monopoly over information, which leaves the reason for Rep. Buck’s support for the legislation as an open question.

Senator Chuck Grassley (R-Iowa) also defended the bill saying that, “competition is good for consumers, and our legislation is simply about ensuring that these Big Tech companies have to compete on an even playing field with small and medium-sized businesses.” Again, Senator Grassley seems to misunderstand the effects of the bill. Amazon has been trying to alert Congress to the fact that the small and medium-sized businesses that supporters of the legislation claim to be protecting with the bill are actually going to be amongst the bill’s greatest victims. 

Amazon warned that it would be “difficult to justify the risk of Amazon offering a marketplace in which selling partners can participate.” The effects of Amazon ending their practice of opening their market of 200 million monthly users to other businesses would have a vastly damaging effect across the mainly small- and medium-size businesses that take advantage of this service. Such businesses could never achieve the same reach on their own. If Amazon were to suddenly deny them access to their platform, their sales would immediately plummet.

Additionally, if this bill embodies the correct way to “increase competition,” would Senator Grassley be willing to extend a similar framework of prohibitions to other industries?  Should the leading pharmaceutical, PBM, agriculture, payment companies be saddled with a similar regulatory approach if doing so is the appropriate way to foster more competition?  If not, why not? Senator Grassley seems to be holding Big Tech companies to a hypocritical standard compared to companies from other industries.

Senators need to have a clear understanding about the impacts of AICOA before they pass it. The bill does not address the censorship of conservatives, limits the reach of small- and medium-size businesses, and ultimately creates a discriminatory version of antitrust law that disproportionately targets the tech industry over other lines of business. Republicans, with this knowledge in mind, should reject Klobuchar’s pet project.