Amazon.com Inc, Apple Inc and other US technology giants would have to sell or exit key businesses under sweeping antitrust legislation proposed by House lawmakers.
The proposal is among a series of bills by House Democrats and Republicans that would place significant new constraints on how tech platforms run their businesses and give antitrust enforcers more legal authority to take on some of
the country’s largest and most lucrative businesses.
“Unregulated tech monopolies have too much power over our economy,” said Representative David Cicilline, a Rhode Island Democrat, who led a 16-month investigation of Amazon, Apple, Facebook Inc, and Alphabet Inc’s Google. “Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us.”
The proposals, along with the separate legislation introduced earlier in the Senate, would lead to the biggest reform of competition laws in the US since the first antitrust statutes were passed in the late 19th century. Lawmakers are aiming to rein in dominant tech companies that critics say are abusing their power over digital markets to entrench their positions and thwart competition.
The five bills, all with Democratic and Republican support, would toughen merger reviews for tech companies, prohibit them from offering certain products and services, and restrict how they treat other businesses that depend on their platforms.
The Nasdaq 100 Index — where tech giants dominate — pared gains after release of the legislation, trailing the broader Nasdaq Composite Index.
“This legislation breaks up big tech’s monopoly power to control what Americans see and say online, and fosters an online market that encourages innovation and provides American small businesses with a fair playing field,” said Representative Ken Buck of Colorado, the senior Republican on House Judiciary Committee’s antitrust panel.
One of the House bills, the “Ending Platform Monopolies Act,” would prohibit tech platforms from owning a business that competes with other products or services offerered on the platform. Such a provision, if passed, would bar Amazon from selling its own branded products, Amazon Basics, for example, or Apple from offering Apple Music, or Google from providing specialized search services in travel, local businesses and shopping.
Unlike the efforts in the House, the main antitrust reform bill in the Senate, from Democratic Senator Amy Klobuchar of Minnesota, doesn’t have Republican backing. So far the only bipartisan bill the Senate has advanced is legislation to increase the filing fees charged to companies in merger reviews to provide more funding for antitrust enforcement.
The proposal could also threaten Google’s $23 billion display-advertising business. Google runs an exchange for ad transactions and provides the technology used by website publishers and advertisers to buy and sell digital advertising, but it also competes in the marketplace as a buyer and a seller.
The proposal on banning some businesses targets one of the main complaints about the big tech companies: that their business models create inherent conflicts by running vast marketplaces that other companies depend on to reach consumers, while at the same time competing against some of those companies with their own offerings.
The legislative package was praised by antitrust experts who say tech giants have used their power to insulate themselves from competitive threats and that existing law is inadequate to challenge the companies.
Charlotte Slaiman, competition policy director at Public Knowledge in Washington, said the bills would go a long way toward opening digital markets to competition.
“Now platforms can discriminate in ways where it’s almost impossible to put competitive pressure on them,” she said. “If we take those tools of control away, then they’re not going to to be able to protect their gatekeeper positions and great new products will be able to have a fair shake.”
Tech trade groups have criticised the proposals as a threat to innovation and consumer choice. The Computer & Communications Industry Association asked Judiciary Committee leaders to hold hearings on the bills before moving ahead with them. The group said the proposals target specific companies while exempting others.
The Chamber of Commerce, the main business lobbying group in the US, said it opposes the House proposals, arguing they are “targeted attacks” on specific companies.
The bill targeting mergers would make it much harder for tech companies to win antitrust approval for deals. It would deem acquisitions illegal unless the companies can show the deal isn’t a threat to competition. That’s a significant change to existing law, which puts the burden on the government to prove a deal is anticompetitive. Under the proposal, the onus would shift to the companies and give the government a leg up in winning cases in court.
Cicilline proposed legislation that would impose non-discrimination provisions on the tech platforms preventing them from putting products and services from competitors at a disadvantage. It would also prohibit them from denying rivals access to their platforms.