ICYMI - Consumer Federation of America, Leading Antitrust Legal Scholars Urge Passage of Klobuchar's Bipartisan Legislation to Restore Competition Online

Press Release

Support continues to build for the American Innovation and Choice Online Act, U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley's (R-IA) bipartisan legislation to restore competition online, with the Consumer Federation of America and leading antitrust legal scholars urging the Senate to pass the legislation.

"To maintain a healthy economy, it turns out we need both sensible regulation and antitrust enforcement to protect against abuses of power… We need to incentivize more competition and more innovation, not less, and need to make sure that American capitalism allows all to compete," the Consumer Federation of America wrote. "The American Innovation and Choice Online Act, S. 2992, addresses the key issues in a sector of the digital economy that has not been addressed by competition policy and antitrust law. It targets Big Data Platforms, which can abuse their market power as gatekeepers and vertically integrated firms, using self-preferencing and data to block competition from independent developers of applications."

"The American Innovation and Choice Online Act, S. 2992, targets the sector with specificity, while ensuring a balance that invites innovation and practices by the incumbents that are not anticompetitive…S. 2992 is the right approach to an important part of the problem. It deserves a vote and passage in the Senate," the Consumer Federation of America continued.

Three leading antitrust legal scholars: Fiona Scott Morton, Professor of Economics at Yale School of Management; Steven C. Salop, Professor Emeritus at Georgetown University Law Center; and David C. Dinielli, Senior Policy Counsel at the Yale University Tobin Center for Economic Policy also voiced their strong support for the legislation.

"We believe the American Innovation and Choice Online Act ("American Innovation") would improve competition in digital markets, prevent further enhancement of market power, increase innovation, and benefit consumers. It therefore should become law in the U.S," the scholars wrote. "American Innovation's restrictions apply to the platforms whose market positions confer undue gatekeeping power, and no others. It is an appropriate expression of democracy for Congress to enact pro-competitive statutes to maintain the vibrancy of the online economy and allow for continued innovation that benefits non- platform businesses as well as end users."

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, Consumer Reports, 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.

In June, a coalition of more than 60 small and medium-sized companies and trade associations, including Spotify, Wyze, FuboTV and Quora, voiced their support of the legislation, highlighting how it will benefit consumers, spur innovation, and boost economic growth.

The same month, 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.

In May, 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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