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Antitrust Reform After AICOA

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Antitrust Reform After AICOA

August 22, 2022

Despite months of pressure on leadership to bring antitrust legislation to the floor, the Senate left town for the August recess without voting on the American Innovation and Choice Online Act (AICOA). While Majority Leader Chuck Schumer has stated that AICOA could still receive a vote this fall, Sen. Amy Klobuchar’s signature effort to rein in Big Tech is unlikely to pass before the November elections. Now, as lawmakers look ahead to the end of the 118th Congress, they should turn their attention to other ways to address market issues posed by large online platforms.

For over a year, Sen. Klobuchar—who chairs the Senate Judiciary antitrust subcommittee—and her counterparts in the House have been pushing legislation aimed at regulating Big Tech. Out of several pieces of proposed legislation, the American Innovation and Choice Online Act emerged as the lead bill. AICOA would prohibit large online platforms from preferencing their own products and services over those of third parties. It would also impose enormous fines of up to 10 percent of annual U.S. revenues for violation.

While AICOA may have been well intentioned, it is problematically vague and takes a punitive approach to reining in Big Tech that is antithetical to decades of American antitrust law. These problems with the bill have led to a split in both parties over whether to support the bill. Given that the Senate remains divided on the issue and has limited floor time before the end of the year, it is unlikely that AICOA will pass this year.

The good news for those in Congress uncomfortable with Big Tech's influence is that there are other options for keeping large tech companies accountable. In the short term, the appropriations process provides an avenue for Congress to empower antitrust enforcers to intervene where the business practices of large online platforms harm consumers. In the House and Senate appropriations packages, both antitrust enforcement agencies—the Federal Trade Commission (FTC) and Department of Justice Antitrust Division—received overdue funding increases. Should these increases make it into the final appropriations package, the additional resources would enable both agencies to better protect consumers.

The report accompanying the Senate appropriations bill for the Subcommittee on Financial Services and General Government encourages the FTC to hire more technologists to assist in enforcement and policy work related to consumer protection, privacy, data security, and competition. Since enforcement actions against large online platforms require a deep level of technical expertise, additional technical staff would improve antitrust enforcement agencies’ ability to handle the complexities of modern digital markets.

Unfortunately, under the chairmanship of Lina Khan, the historically bipartisan FTC has increasingly become a political agency. Split votes on whether to block Big Tech acquisitions, such as Meta’s attempted acquisition of Within, have become commonplace. Republican Commissioner Noah Phillips, who recently announced his plan to resign from the FTC, reportedly made the decision in part because of a lack of compromise and open discussion at the Commission. In order to address politicization at the FTC, Congress should also consider using its authorities to direct the Commission to focus any additional resources on its core mission of protecting consumers.

In the long term, providing antitrust enforcers with more resources may not be enough to address potential consumer harms posed by large online platforms. The complexities of modern, Internet-based markets do not always fit cleanly within the century-old regulations established to rein in railroad and oil monopolies. Instead of supporting wholesale changes that run counter to existing antitrust law, lawmakers should work to refine more moderate reform efforts, such as the Tougher Enforcement Against Monopolies (TEAM) Act from Sen. Mike Lee.

The TEAM Act would codify and expand upon the consumer welfare standard, which has been the foundation of antitrust law for decades. This relatively light-touch approach to antitrust reform would bring much-needed clarity to how antitrust enforcement agencies should approach free online services while ensuring that antitrust enforcement focuses on direct harm to consumers. The TEAM Act could serve as a jumping-off point for lawmakers concerned with consumer protection.

Now that AICOA is unlikely to move, lawmakers can turn their attention to more constructive antitrust reforms. Over the next few months, Congressional appropriators have an opportunity to provide antitrust enforcers with the resources they need to properly police consumer harms. In the next Congress, lawmakers should seek to refine more reasonable legislation such as the TEAM Act to update antitrust law for the modern age.

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