The American Innovation and Choice Online Act sets commonsense rules of the road for major digital platforms to ensure they cannot unfairly preference their own products and services
Maryland Small Business Owner: “All that any small business asks for is a somewhat level playing field and a somewhat fair environment in which to compete…We need to set clear and effective rules that protect competition and small firms doing business on these platforms.”
WASHINGTON - At a Small Business Majority and American Economic Liberties Project event titled, “Level the Playing Field: How an Antimonopoly Agenda Supports Small Business,” U.S. Senator Amy Klobuchar (D-MN), Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, highlighted how her bipartisan competition legislation, the American Innovation and Choice Online Act, will boost innovation and entrepreneurship. Klobuchar was joined by White House National Economic Council Deputy Director Bharat Ramamurti and three small business owners from across the country.
Klobuchar underscored how digital monopolies and technology companies’ anti-competitive behavior harms small businesses and prevents innovation: “We’re here because we know we have a monopoly problem and it’s hurting small businesses… This is especially true in our digital market where a handful of powerful corporations stand as virtual gatekeepers to opportunities for so many businesses.”
“I don’t have to tell any of you what a bind this creates for small businesses…These practices are bad for entrepreneurs, innovators and consumers alike,” Klobuchar continued. “We need our economy to succeed. And to do that you can’t have dominant companies, scaring away all the competition, buying out all the competition and making for hardly any competition.”
Small businesses owners also emphasized the need for rules of the road to ensure a competitive, level playing field for small businesses operating on digital platforms. “All that any small business asks for is a somewhat level playing field and a somewhat fair environment in which to compete,” said Mike Brey, President of Hobby Works, a Maryland hobby shop business.“We need to set clear and effective rules that protect competition and small firms doing business on these platforms.
In October, Klobuchar and Grassley introduced the American Innovation and Choice Online Act to set commonsense rules of the road for major digital platforms to ensure they cannot unfairly preference their own products and services. In January, the legislation passed the Senate Judiciary Committee by a bipartisan vote of 16-6, making it the first major bill on technology competition to advance to the Senate floor since the dawn of the Internet. This week, Klobuchar and Grassley announced that the Department of Justice voiced its strong support for the American Innovation and Choice Online Act.
The Senate legislation is cosponsored by Senators Dick Durbin (D-IL), Lindsey Graham (R-SC), Richard Blumenthal (D-CT), John Kennedy (R-LA), Cory Booker (D-NJ), Cynthia Lummis (R-WY), Mazie Hirono (D-HI), Mark Warner (D-VA), Josh Hawley (R-MO), Steve Daines (R-MT), and Sheldon Whitehouse (D-RI), and endorsed by companies including Roku, DuckDuckGo, Yelp, Spotify, and Match Group. Over 35 small and medium-sized tech companies signed a letter supporting this legislation and urging Congress to take action to advance it.
The full transcript of Klobuchar’s remarks are available below:
Hello to everyone joining today’s webinar. I’d like to thank John, Nidhi. and Denise, as well as Small Business Majority and the American Economic Liberties Project for making this great webinar possible. I’d also like to thank all of the small business owners and entrepreneurs joining today for strengthening our economy, with both your ideas, and putting those ideas into action and then finally going the extra mile with your commitment to fighting for a level playing field. Because you’re not just doing it for yourselves, you're doing it for so many other small businesses who may not even know who you are. And that is true activism and a true belief in America and the capitalist system.
We’re here because we know we have a monopoly problem and it’s hurting small businesses. A majority of small business owners say one or more large companies dominate the market in their industry and almost half agree that monopolistic practices have become more prevalent not less in recent years.
This is especially true in our digital market where a handful of powerful corporations like Google and Amazon stand as virtual gatekeepers to opportunities for so many businesses. In the early days of the Internet, Google was just one of the many upstart search engines. But today Google has driven out many of the other players and controls more than 90% of the online search market. It also dominates huge swaths of the digital economy and offers services that compete with companies like Yelp and Kayak and Roku. Not to mention countless small businesses and startups. Yet we currently have no effective laws on the books in the United States preventing Google from using its market power as a search engine to self preference its own products and services over those of its competitor, regardless of quality or price. That means Google has free reign to steer you to its own products over other equally competitive ones or maybe even better ones. If you search for videos, Google’s Youtube will be at the top of your search result. If you search for news, Google News will be listed first. And if you’re looking for a restaurant in Minnesota - you’ve got a lot of amazing options - Google has the power to steer you to its own restaurant review tool.
I’m not saying that we get rid of any of this. We’re just saying you’ve got to have an even playing field. That’s what we need to get rid of - is the self preferencing.
Another example of Big Tech’s bullying dominance: The Wall Street Journal reported that an Amazon employee working on a new product, accessed data on a car trunk organizer manufactured by a third party seller called Fortem, which is a four-person company run by two 29-year-olds. Soon after, Amazon launched three trunk organizers that were similar to Fortem’s, under its own Amazon Basics private label brand.
I don’t have to tell any of you what a bind this creates for small businesses. Entrepreneurs shouldn’t have to give Amazon the tools to outcompete them in order to access the largest e-commerce platform in the world. These practices are bad for entrepreneurs, innovators and consumers alike.
Here’s the good news: We’re taking action. I’m working with partners in the Senate and the House to pass my bill, the American Innovation and Choice Online Act. In Samantha Bee’s words, we have an Ocean’s Eleven of cosponsors. That includes Senators Chuck Grassley, and Dick Durbin, Richard Blumenthal, Lindsey Graham, Mazie Hirono, John Kennedy, Mark Warner. What do these people have in common? They all do believe we should have an equal playing field. Lawmakers from across the ideological spectrum understand that we must act to reign in the power of digital gatekeepers.
What does the bill do? It prevents dominant tech platforms that have the power to control how or- even if- businesses can reach their customers online from preferencing their own products in ways that harm competition. So monopolies like Google won’t be able to put their products ahead of competing products and search results just because they control the search engine and have 90% of the market. And Amazon won’t be able to use small businesses’ proprietary data to compete against them. That’s what leveling the playing field is all about.
Why am I confident about this bill? Number one, the tech lobbyists seem pretty concerned it’s going to pass. I don’t think they would spend $70 million trying to stop a bill that didn’t have a chance. Walking around the Capitol, you can find them around every corner, every room. And by the way, just for perspective, their side has 2700 tech lobbyists and I have three lawyers. But guess what? I’ve got really good lawyers and they’re really devoted. And I have all of you that care about small business and truly believe that we need our economy to succeed. And to do that you can’t have dominant companies, scaring away all the competition, buying out all the competition and making for hardly any competition.
We know we’re up against a lot. And I’m not trying to win a popularity contest with tech companies. And I’m not a neanderthal. I’ve got all kinds of - here’s my phone. But what I believe in, that we need these products and we’re excited about them. We’re glad that they employ a bunch of Americans, but we also can do all that and still have fair competition
What else am I sure about? Well, number two: In the face of attack ads, lobbyists, straight up lies about the bill, the American Innovation and Choice Online Act advanced out of the Senate Judiciary Committee by a bipartisan vote of 16-6. I’m pretty proud of that. And guess what? It’s the first bill since the advent of the Internet that is a competition tech bill that’s headed to the Senate floor. And I’m going to keep fighting with my partners from both parties in the Senate and the House until it is signed into law.
Thank you for inviting me to share a few words and enjoy the rest of the event. You deserve it. And then let’s get to work.