By: Adam Conner & Erin Simpson (Center for American Progress)
The past 25 years have brought momentous growth in online services. Should the United States wish to continue such dynamism online for the next quarter century, attention from Congress is required. Decades have passed without major legislation for internet companies. In that time, a handful of companies have come to control access to major areas of online commerce and economic activity. Significant evidence has amassed showing the largest companies are abusing their positions to punish rivals, thwart would-be competitors, entrench existing holdings, and leverage their power to win in new markets. The Center for American Progress has previously raised these kinds of digital platform behaviors as cause for concern and called for new privacy, regulatory, consumer protection, and antitrust policies.3 Given the centrality of these digital platforms to economic prosperity and Americans’ everyday lives, anti-competitive behaviors in online commerce represent a wide-ranging threat that should be addressed.4
This report assesses two bipartisan proposals to tackle digital gatekeepers’ conduct of most concern: Sens. Amy Klobuchar (D-MN) and Chuck Grassley’s (R-IA) American Innovation and Choice Online Act (S. 2992, henceforth American Innovation) and Sens. Richard Blumenthal (D-CT) and Marsha Blackburn’s (R-TN) Open App Markets Act (S. 2710, henceforth Open App Markets).5 These bills propose rules that would prohibit critical digital platforms from arbitrary discrimination against competitors; restrain economically harmful promotion of platforms’ own products over those of competitors (self-preferencing); and ensure consumers have access to competitive, functional app ecosystems.
As these two bills are likely to come to the Senate floor in summer 2022, this report details the latest version of each bill followed by a discussion assessing the potential benefits and limitations of the current proposals.6 Future updates may address those bills likely to be acted upon by the House of Representatives in the 117th Congress. Weighing the net outcomes, this report concludes these bills are substantive, worthwhile steps in delivering benefits for consumers and curbing serious economic abuse from the largest players. CAP has previously expressed its support for the proposals, and recent changes to address concerns have only made the bills stronger.7
Sustainably addressing the range of issues posed by online services over time will require dedicated legislation on issues such as privacy and increased tech regulatory capacity, but these proposals are important steps to combat some of the most pressing areas of economic abuse.8 By purposefully targeting the anti-competitive practices of most concern, the bills offer the United States a means to materially improve consumer choice in the near term and create a more dynamic online economy in the long term. The Center for American Progress endorses the American Innovation and Choice Online Act and the Open App Markets Act. CAP urges Congress to take meaningful action to enhance consumer choice and competition online by passing these bipartisan bills into law this summer…
