When a bill dies because its potential harms to consumers, small businesses, and even national security are laid bare, that should be the end of it. Unfortunately, that’s not so for an unpopular antitrust bill.

This week, Sens. Grassley (R-IA) and Klobuchar (D-MN) resurrected the American Innovation and Choice Online Act (AICOA), reintroducing it. The third time is not the charm. AICOA boasts the same heavy-handed, European-esque approach to large technology companies based on the faulty premise that their growth is owed to illegal anticompetitive behavior.

Women make the lion’s share of spending decisions in American households and are leading small business growth today. They care about low prices, convenience, and access to new services that make their lives and work easier. Policies like AICOA that aim to undercut Big Tech will have an outsized negative impact on American women. 

Consumers and small businesses lose if AICOA passes

Like past iterations of the bill, AICOA prohibits a cherry-picked handful of large platforms from engaging in what it considers anticompetitive activities, including preferencing their products or services on their platforms, using private data obtained from their customers to inform product development, and limiting competitors’ access to platform features. 

Many of these are long-standing practices in the retail industry, such as grocery stores and big box stores with their in-house signature brands. Despite years of employing such practices, retail remains healthy and dynamic. Choices in products and services have not diminished over time but only increased as Amazon, Google, Meta, and others continue to innovate. Still, e-commerce comprises only about 1 in every 5 retail dollars spent in the U.S.

AICOA also aims to control how platforms handle the portability of users’ data from one digital platform to another, rankings of content in searches, and other business decisions that large platforms make, such as how they enforce their terms of service.

AICOA would empower federal and state agencies to enforce the law through civil lawsuits in federal district courts. The bill’s sponsors leave remedies up to the courts, which could lead to hefty penalties and lawsuits with massive windfalls.

As we’ve written about prior (here, here, and here) AICOA works against consumers by outlawing the common business practices that are standard practice in retail or the product integrations that drive efficiency and user ease from Google Maps to Amazon’s free 2-day shipping. Amazon Prime Days would disappear. Integrated digital services that small businesses depend on to manage functions such as fraud prevention, payment processing, product discovery, and security could all be compromised due to compliance with the bill. 

Sacrificing the consumer welfare standard

Antitrust law has been governed by the consumer welfare standard for decades. This standard looks to increased prices as a signal of anticompetitive behavior, not size or user headcount. Big does not mean bad; otherwise, Walmart and Costco could be slapped with a scarlet letter “A” for anticompetitive, given they are ranked #1 and #3 among retailers in the U.S. As mentioned, retail still remains robust, yet e-commerce only comprises about 17-20% of U.S. retail sales.

AICOA moves antitrust enforcement away from the consumer welfare standard, which will lead to higher prices for consumers and small businesses while weakening popular services. 

AICOA mimics Europe’s DMA

AICOA also moves the U.S. closer to Europe’s approach to antitrust, one that unfairly undermines U.S. businesses. Provisions in AICOA are similar to those in the European Union’s biased anti-Big Tech Digital Markets Act. As we’ve also covered, the

“DMA unfairly targets companies of a particular size, but not all of them. According to its definition, a gatekeeper must reach a threshold in turnover or market capitalization for three consecutive years, provide its service in at least three EU countries, and hold 10% of the EU population as monthly active users and at least 10,000 active annual business users. The impact of the DMA will fall heavily on American businesses but somehow spare European companies…. If the EU enforced its new regulations, violators would face steep fines.”

Opposition is lining up against AICOA

This bill was introduced with fewer co-sponsors than previous iterations as lawmakers committed to free markets reject heavy-handed, European copycat policies. In addition, 30 groups called on Congress to reject this bill, noting that “Not only is AICOA unnecessary to correct any digital market failures, but it is likely to have devastating consequences for innovation, consumers, and small tech firms.” 

Button Line

American corporate dominance is the product of a legal and regulatory system that encourages entrepreneurship, rewards risk-taking, promotes free markets, and restrains government control. AICOA and efforts like it work against these principles to the detriment of Americans, not for them.