Klobuchar-Grassley Antitrust Bill on “Self-Preferencing” Would Distort Competition and Undermine Innovation, Says ITIF

October 14, 2021

WASHINGTON—With Sens. Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) reportedly set to release a bill prohibiting technology platforms from favoring their own products, the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, issued the following statement from Aurelien Portuese, director of ITIF’s Schumpeter Project on Competition Policy:

This is the latest example of Congress advancing legislation in the name of antitrust reform that will end up distorting competition and deterring innovation to the detriment of consumers. 

The House unveiled a deeply problematic package this summer that would reform antitrust laws according to firms’ size instead of their conduct. Now Senators Klobuchar and Grassley say they are planning to introduce a bill that would prohibit technology platforms from favoring their own products and services. In both cases, U.S. lawmakers are taking cues from their counterparts in Europe, who do not have U.S. economic interests in mind.

The idea of prohibiting “self-preferencing” mimics the European Commission’s proposed Digital Markets Act. It would harm consumers because self-preferencing usually fosters competition rather than undermining it. Prohibiting self-preferencing would put a select handful of companies in a special class that is no longer able to improve their products and offer better prices. In addition to harming consumers, that would create an unfair playing field, since it would exempt other big rivals, many of which are foreign, from the same restrictions. The bottom line is that the Klobuchar-Grassley bill would disrupt innovation without achieving anything beneficial. 

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Klobuchar-Grassley Antitrust Bill on “Self-Preferencing” Would Distort Competition and Undermine Innovation, Says ITIF