By: Tom Hebert
Sen. Amy Klobuchar (D-Minn.) has introduced the “American Innovation and Choice Online Act,” companion legislation to Rep. David Cicilline’s (D-R.I.) House version. Several Senate Republicans, motivated by concerns over Big Tech censorship of conservatives, have cosponsored the Klobuchar bill.
While conservative anger at Big Tech is completely legitimate and should be addressed, the Klobuchar bill does nothing to fix the problem. Instead, the Klobuchar bill would put leading American companies into a “Mother-May-I” relationship with unelected Biden bureaucrats, stifling innovation and raising prices on goods and services as American families grapple with runaway inflation.
The Klobuchar bill targets companies with a market capitalization/net sales of $550 billion and 50 million monthly users. While the bill was clearly written to ensnare Google, Amazon, Facebook, Apple, and possibly Microsoft, any company that grows above this government-set size will get pummeled with crippling new regulations. This is a de facto cap on innovation – any smart company hovering near this threshold will do legal gymnastics to avoid getting whacked.
The legislation bans targeted companies from “self-preferencing” their own products or services in a way that would “materially harm” competition. In plain English, the Klobuchar bill effectively bans targeted companies from promoting or selling their own generic products alongside name-brand products.
So-called self-preferencing is not endemic to the companies this bill targets. Brick-and-mortar retailers like CVS or Target routinely sell generic goods right alongside brand name products. These retailers promote these goods with promotional devices like end-cap displays, discounts, and buy-one-get-one deals. This benefits shoppers through lower prices and more choices.
If implemented, the Klobuchar bill would ban services and products that make life more convenient and affordable for American shoppers. Amazon would no longer be able to offer free Prime shipping or sell generic AmazonBasics products more affordable than name-brand goods. Google would be banned from displaying Youtube links or Maps directions when searched. Apple could not preinstall their native apps like iMessage or FaceTime, making your new iPhone virtually useless out of the box.
The Klobuchar bill will also raise prices on common household items for Americans already struggling with runaway inflation. The consumer price index increased by 5.4 percent on an annualized basis before seasonal adjustment in September, matching a 13-year high, according to the Bureau of Labor Statistics (BLS). With the price of gasoline up a staggering 42.1 percent in the past 12 months alone, American families are increasingly reaching for generic products just to make ends meet.
This bill is barely antitrust law as traditionally written or understood – in reality, this is European-style regulation dressed up as antitrust law. Banning companies from offering free apps or services or selling generic products does nothing to stop or even limit conservative censorship. Instead, it is simply a Trojan horse designed to give unelected Biden bureaucrats even more power to control the economy.
The left has not been shy about their plan to use antitrust law to push a progressive social agenda, and there is no reason to believe they will stop with Big Tech. Former FTC Acting Chair Rebecca Slaughter said that antitrust law was a legitimate way to address “systemic racism.” Klobuchar has repeatedly said that she wants to go after every industry “from cat food to caskets.” This bill is just the beginning.
Conservatives know that if you give the government an inch, it will take a mile. The Klobuchar bill is the wrong approach to addressing Big Tech censorship of conservatives and will raise prices on everyday goods for American families.