Sen. Klobuchar’s Bill is About Crony Capitalism, Not Competition

Sen. Amy Klobuchar (D-Minn.) has released a third version of her half-baked “American Innovation and Choice Online Act” (S. 2992), legislation that would whack companies above a government-set size with crippling new regulations. 

Instead of addressing fundamental problems with the legislation, the new draft contains new carveouts for select industries and companies. While no company or industry should be subjected to the Klobuchar bill’s new mandates, the new draft raises crucial questions about the stated impartiality of Klobuchar’s drafting process. 

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

The Senate Judiciary Committee marked up S. 2992 in late January in chaotic fashion. Lawmakers, who had no public opportunity to debate the substance or ramifications of S. 2992, proposed 117 amendments to the bill. 

Even supporters acknowledged that the bill was a work in progress. Sen. Alex Padilla (D-Calif.) raised doubts that self-preferencing was even a problem that Congress needed to solve, saying that he was “…not yet convinced that this bill as currently drafted will actually provide the net benefit to consumers that we’re seeking.” Sen. John Kennedy (R-La.) said that he anticipated sweeping changes to the bill before a full Senate vote, and if he’s not involved in making those changes, told lawmakers that “[he’ll] be off the bill faster than you can say Big Tech.” 

The latest draft does not address these issues. Instead, the new draft nibbles around the edges to exempt certain select industries from new federal mandates. 

The second version of the draft defined an online platform as a“website, online or mobile application, operating system, digital assistant, or online service” that “facilitates the offering, advertising, sale, purchase, payment, or shipping of products or services.” The latest version strikes the “facilitating payment” language, exempting banks and credit card companies. 

The biggest change contained in the new draft is an explicit carveout for broadband providers. The updated definition of an online platform “does not include a service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service.”  

It took months of machinations to secure carveouts for two massive industries. Zero progress has been made on substantive fixes to the legislation. 

Klobuchar and her allies have touted S. 2992 in the most pious possible ways, describing the bill as the organic result of a multi-year investigation into the supposed anticompetitive activities of a select few companies. 

In reality, Klobuchar wraps herself in false virtue, and the new carveouts continue Klobuchar’s pattern of crony capitalism. Another antitrust bill that Klobuchar sponsors carves out Target, the largest employer in her home state of Minnesota. S. 2992’s carveouts did not fall out of the sky. 

To be clear, the best fix Klobuchar could make to S. 2992 is gathering up all existing copies and shredding them. No industry should be subjected to the bill’s onerous new mandates. 

The carveouts make it clear that S. 2992 is not about addressing anticompetitive conduct. Instead, the bill is about giving the Biden Administration sweeping new powers to attack industries Klobuchar doesn’t like. No Republican should vote for Klobuchar’s pet project.