Consumer Reports: American Innovation and Choice Online Act will “incentivize companies big and small to innovate to better meet consumer needs and increase choices”

WASHINGTON - In a new report published this week, Consumer Reports renewed its support for  U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley’s (R-IA) bipartisan legislation to restore online competition, highlighting how the American Innovation and Choice Online Act will lower costs for consumers and boost innovation. 

Consumer Reports asserted the legislation will “enable more competition in online marketplaces and incentivize companies big and small to innovate to better meet consumer needs and increase choices.” 

From the report: 

  • The legislation “sets fair market rules which will mean more competition, innovation, and choices for consumers.”
  • Under the legislation, Amazon could “continue to offer Prime but ensure that all sellers irrespective of whether they use Amazon’s own fulfillment service are ranked objectively in product search results. Consumers see better results that meet their requirements and budget.” 
  • The legislation would ensure companies can continue to “develop and sell…private-label products, but cannot use confidential third party data to do so."
  • The legislation will create a “diverse online ecosystem in which personally targeted advertising business models do not dominate.”
  • The legislation will benefit app developers by allowing them to accrue “better data to improve their services...Consumers benefit from more innovation and better pricing terms.”

This support builds on growing momentum for the American Innovation and Choice Online Act. The legislation has been endorsed by the Center for American Progress, leading national security experts, and small business organizations such as Main Street Alliance, Small Business Rising, The National Association of Wholesale Distributors, and the American Hotel and Lodging Association. 

This week, CNBC reported that small business sellers on Amazon are expressing their support for the American Innovation and Choice Online Act, revolting against Amazon’s misleading claims about the legislation. 

Last month, Secretary of Commerce Gina Raimondo expressed her backing of the legislation. In April, the Department of Justice voiced its strong endorsement of the legislation, encouraging Congress “to work to finalize this legislation and pass it into law.” 

Recently, the International Brotherhood of Teamsters, Service Employees International Union, and the Strategic Organizing Center sent a letter to Congressional leaders urging the legislation’s passage. The labor organizations wrote that the legislation “can and will help turn the tide in favor of working people, so they may share in the prosperity they help create every day…and help prevent these digital behemoths from…stifling the equality and fairness in the economy that workers so urgently need and deserve.” Additionally, a coalition of 58 non-profit and public policy organizations also wrote a letter endorsing the bill. 

The Washington Post Editorial Board and Boston Globe Editorial Board have also expressed their support for the legislation. 

In January, the bill 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. 

In December, coalition of 35 small and medium tech companies including Yelp, Sonos, Patreon, Y Combinator, and DuckDuckGo urged the legislation’s passage, citing the need to “help restore competition in the digital marketplace and remove barriers for consumers to choose the services they want.”

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. Representatives David Cicilline (D-RI) and Ken Buck (R-CO) lead companion legislation in the House, which passed the House Judiciary Committee by a bipartisan vote of 24-20 last June. 

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).

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