Tech Industry Urges Congress to Slow Down New Antitrust Bills

Tech giants that could split under a series of new antitrust bills are speaking out against the measures, as lawmakers are due to debate them on Wednesday.

Amazon and Google issued statements Tuesday opposing the bills. Apple and Facebook, which were also the subject of the House Judiciary Committee’s investigation into digital markets, have yet to release their own statements.

But industry groups backed by tech companies have also rejected the legislation, arguing that it would prevent companies from operating popular consumer services and ultimately hurt small businesses and entrepreneurs.

The six bills to be considered on the sidelines Wednesday, where lawmakers will discuss the proposals and any amendments before deciding whether to move forward, would have a profound impact on the tech industry and possibly beyond.

Amazon and Google asked the Judiciary Committee to push for the legislation breaks, which are targeting a full make-up of the committee in an unusually short period of time, less than two weeks since the majority were introduced.

Google’s vice president of government affairs and public policy, Mark Isakowitz, said in a statement that the company is not opposed to the new regulation, but warned that the bills on the table would “break” popular consumer services.

“As many groups and companies have observed, the bills would force us to downgrade our services and prevent us from offering important functions used by hundreds of millions of Americans,” he said. “All of this would drastically undermine US technology leadership, damage the way small businesses connect with consumers, and raise serious privacy and security concerns. We respectfully recommend that these consequences receive more careful consideration before Congress acts. ”

Amazon’s vice president of public policy, Brian Huseman, also warned of “significant negative effects” on Amazon consumers and the small and medium-sized businesses that sell on the platform. Amazon is still reviewing the invoices, he added.

“More than half a million American small and medium-sized businesses make their living through the Amazon Marketplace, and without access to Amazon customers, it will be much more difficult for these third-party sellers to raise awareness of their business and earn comparable income. He said in a statement.

“Removing the selection of these sellers from the Amazon store would also create less price competition for products and would likely end up raising prices for consumers,” Hseman said. “The Committee is moving unnecessarily fast to push through these bills. We encourage President Cicilline and committee members to slow down, postpone marking, and thoroughly examine the language in the bills for unintended negative consequences. “

“Antitrust laws should promote competition and protect consumers, not punish successful American companies,” said a Facebook spokesperson. “The surest way to address the challenges facing the Internet today is to address the areas of greatest concern to people, such as content moderation, election integrity and privacy, not to attempt to dismantle the products and services of that people depend. These bills underestimate the relentless competition within the tech sector, including competition from foreign companies like TikTok, WeChat, and Alibaba. The proposed bills are not a solution to the ever-changing challenges of the consumer Internet; They are a poison pill for the US tech industry at a time when our economy can least afford it. “

Apple did not comment on the bills.

Two of the bills could require structural changes, or breaks, in several of the platforms due to their prohibitions on owning and operating business lines that present conflicts of interest and provisions against discriminatory business practices.

Others would give regulators an edge in antitrust proceedings by shifting the burden of proof in merger cases to the dominant platforms, increasing merger filing fees, and giving state attorneys general more voice in their place. antitrust cases. Another bill in the package would make it easier for consumers to switch platforms by requiring that services allow users to carry their data with them.

The invoices would specifically apply to platforms with more than $ 600 billion in market capitalization and 50 million monthly active users in the US, limiting their application to only the largest companies. But industry players argue that its implications will go beyond their own walls due to the great impact of their services on the lives of consumers.

Before the company’s remarks, industry associations funded by several of the companies also rejected the bills and asked for additional time to consider their implications. TechNet, whose members include Amazon, Apple, Facebook and Google, wrote to the Judiciary Committee on Monday requesting that the panel hold hearings, “rather than rushing legislation from introduction to marking in just 12 days.” Comcast, which owns CNBC’s parent company NBCUniversal, is also a member of the group.

TechNet and a dozen other advocacy groups also signed a letter warning of the negative impacts of two of the bills introduced by the chairman and vice chairman of the antitrust subcommittee, Rep. David Cicilline, DR.I., and Rep. Pramila. Jayapal, D-Wash., Would have on consumer services.

Cicilline’s American Choice and Innovation Online Act would prohibit dominant platforms from giving advantages to their own services over other competitors on their platforms. Jayapal’s Final Platform Monopolies Law would prevent dominant platforms from owning businesses that present clear conflicts of interest, such as those that could incentivize a platform to favor its own services.

“Representative Cicilline’s bill would prohibit Google from displaying YouTube videos in search results; would prohibit Alexa users from ordering Amazon products; it would prevent Apple from pre-installing ‘Find My Phone’ and iCloud on the iPhone; would ban the Xbox game store from coming with the Xbox; and ban Instagram stories from the Facebook news feed, “industry groups wrote to committee members. “Representative Jayapal’s bill would force free apps like Google Maps, YouTube, WhatsApp, Instagram, LinkedIn, iMessage and FaceTime to be stripped of their parent companies, putting these free services at risk and making them less accessible to the public.”

Rich Luchette, a spokesman for Cicilline, called the industry claims “unfounded conspiracy theories,” in a statement to CNBC.

“Big Tech’s track record in disinformation speaks for itself,” Luchette said. “Just as they have profited from QAnon and anti-vaccines in the past, they are now spreading unsubstantiated conspiracy theories a day before Congress takes its most significant action to date to break their monopoly power. Big tech likes to have monopoly power and will do everything they can to maintain it, including lying about bills that will build a stronger online economy by giving consumers, workers, and small businesses greater opportunities, innovation, and options “.

A Jayapal spokesperson did not immediately respond to CNBC’s request for comment, but told Bloomberg that the bill “requires dominant platforms, including Amazon, to divest lines of business, such as Fulfillment by Amazon, where the power of Control of the platform allows you to favor your own services ”. Regulators and courts would ultimately determine how they are applied.

Another group that speaks out against one of the bills is the National Venture Capital Association, whose members include various technology companies or their venture capital branches (including Comcast Ventures). The NVCA said it opposes one of the new bills that would shift the burden of proof to dominant platforms to show that the new mergers would not violate antitrust laws. In its current form, the government must show that a transaction will reduce competition and harm consumers, which some law enforcement advocates say is too difficult to do effectively under current case law.

The NVCA warned that emerging companies would be the ones to suffer such a bill because being acquired is the “most likely liquidity opportunity” for entrepreneurs and “necessary to make the initial investment attractive relative to other asset classes that are held at short term”. “

“Barring business acquisitions by select acquirers it would close the door to this opportunity for many startups, depressing the economy of initial investment and thus creating a significant disincentive for new business formation, job creation. and innovation in our country ”, wrote the group.

Spokespeople for the legislators who introduced the bill, Representatives Hakeem Jeffries, DN.Y., and Ken Buck, R-Colorado, did not immediately provide comment.

The Judiciary Committee will consider the antitrust bills on Wednesday at 10 am ET.

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