As the Senate Judiciary Committee will consider the American Innovation and Choice Online Act on January 13, it appears that Congress is ready to make it harder and more expensive for consumers to enjoy the benefits of digital platforms. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) recently introduced a bill that prohibits large firms from promoting their own products and services over those of rivals—the American Innovation and Choice Online Act. Another bill introduced by Senators Tom Cotton (R-AK) and Amy Klobuchar (D-MN) prohibits a select group of digital platforms from acquiring any corporate asset—the Platform Competition and Opportunity Act. These are the latest examples of legislative efforts prompted to bolster “fair competition” but which eventually will promote neither fairness nor competition.
As Aurelien Portuese explains in a commentary piece for the Washington Legal Foundation, the Klobuchar-Grassley bill aims at banning even the most common business practices such as promoting one’s products on one’s own platform, although consumers prefer the much cheaper “private labels.” This preference is visible in both the offline space, but also online—simply putting it, for every customer who buys a Walmart Great Value product in-store there’ll be one who chooses Amazon Basics over some other brand. And the price is the main driver. The bill prohibits practices that overwhelmingly are procompetitive. This bill appears to be the most advanced in the congressional procedure.
