How new antitrust bills could hit Amazon, Apple, Facebook and Google
The legislation targets Silicon Valley's business practices.
US lawmakers are targeting Big Tech.
Big Tech is a big target. US lawmakers unveiled a slate of five bills last week that are designed to curb what they call the "unregulated power" concentrated in Silicon Valley. The legislation, if passed, would mark the biggest changes to antitrust law in decades.
Though the legislation would affect all companies, lawmakers clearly had four in mind. Rep. Ken Buck, a Colorado Republican who is the ranking member on the House antitrust subcommittee, wasn't shy about naming names.
Read more: What proposed antitrust legislation could mean for Big Tech... and you
" Apple , Amazon , Facebook , and Google have prioritized power over innovation and harmed American businesses and consumers in the process," Buck said in a statement. "These companies have maintained monopoly power in the online marketplace by using a variety of anticompetitive behaviors to stifle competition."
Apple and Amazon didn't respond to requests for comment. Facebook and Google declined to comment.
The government's fight against Big Tech has picked up in recent years. Last July, Congress hauled the CEOs of the four companies in for a grueling six-hour hearing. On Tuesday, President Joe Biden appointed Lina Khan, a prominent critic of Big Tech and the author of an academic paper titled "Amazon's Antitrust Paradox," to head the Federal Trade Commission after the Senate approved her nomination to the body earlier in the day.
These are the five bills:
- American Innovation and Choice Online Act, which prohibits the use of a dominant platform to discriminate against rivals by giving preference to its own products.
- Platform Competition and Opportunity Act, which bars the use of acquisitions to smother competitive threats.
- Ending Platform Monopolies Act, which restrains dominant platforms from using their power across multiple types of business to give themselves unfair advantages.
- Augmenting Compatibility and Competition by Enabling Service Switching Act, or Access Act, which promotes competition by making it easier for businesses and consumers to move data when they want to switch to a new provider.
- Merger Filing Fee Modernization Act, which amends filing fees for the first time in two decades and provides the government funds to pursue antitrust actions.
The bills have a long way to go before they could become law. But here's how they could impact Amazon, Apple, Facebook and Google if enacted.
Amazon
The American Innovation and Choice Online Act appears aimed straight at Amazon, though it would likely affect Apple and Google too. The act would restrict how the e-commerce giant can promote its own products, like AmazonBasics, over competing products in its search results. The bill would also make it harder for Amazon to use data from other vendors to create competing items.
The bill specifies that an e-commerce platform can't require other businesses to buy additional products to receive "preferred status or placement," something that a phone accessory maker accused Amazon of doing. PopSockets CEO David Barnett testified in Congress last year that Amazon required his company to make a $2 million ad buy before Amazon would remove counterfeit versions of PopSockets' products from the site. Amazon has denied the claim.
-- CNET's Laura Hautala
Apple
Apple's App Store is a target of the proposed legislation, particularly the American Innovation and Choice Online Act and the Ending Platform Monopolies Act. Critics have already slammed the App Store as anticompetitive because it's the only place iPhone and iPad users are allowed to download apps for their devices. Apple also requires developers to use its in-app payment processing service and to pay a commission of up to 30% on all App Store sales, including for streaming music subscriptions.
The Ending Platform Monopolies Act could affect Apple's free Pages, Keynote and Numbers apps, which directly compete with Microsoft's Word, PowerPoint and Excel. It could also threaten Apple's stranglehold on in-app purchases.
The App Store is estimated to have racked up about $64 billion in total sales last year, according to CNBC. The estimate includes both Apple's take and developer revenues. (Apple doesn't disclose detailed financial information for the App Store.)
-- CNET's Ian Sherr
The Platform Competition and Opportunity Act would bar Facebook and similar platforms from swallowing up competitive threats, a practice the giant social network has been accused of. For example, Facebook purchased Instagram, the photo-focused social media site, in 2012 rather than competing with it. Facebook has long been accused of copying, killing or acquiring its competition.
The Access Act appears aimed at the difficulty that people encounter when trying to move data, such as their friends list, to other social networks. Lawmakers have already complained about Facebook's control over user data.
-- CNET's Queenie Wong
At least three of the bills could have sweeping consequences for Google, which is owned by Alphabet. The Ending Platform Monopolies Act, which prohibits ownership of businesses that create a "conflict of interest," could mean Google would have to sell YouTube because it owns the search engine that surfaces videos for people.
The American Innovation and Choice Online Act's ban on "self-preferencing" would likely affect Google's search business. The company has already been accused of displaying its own shopping and travel content ahead of competitors in search results. Any law that targets Google's search-and-ads business is a threat to the company's lifeblood because it generates the bulk of its roughly $180 billion a year in revenue. The act could also impact Google's Play Store, where users get apps for its dominant Android operating system.
Another bill, the Platform Competition and Opportunity Act, could hamper Google's ability to grow. The legislation makes it harder for a giant like Google to get regulatory approval to acquire companies, meaning deals like the 2008 purchase of DoubleClick, which turned Google into an advertising giant, would face more scrutiny. The same goes for the 2006 buyout of YouTube, which is now the dominant video platform on the planet. And as Google seeks to expand into other businesses, future acquisitions could get nixed as anticompetitive.
-- CNET's Richard Nieva