The Senate Bill That Is Scaring Big Tech

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  • But according to the tech giants and their lobbyists and front groups, the bill would be a disaster for the American consumer.
  • Google can’t choose to give YouTube links when someone does a video search unless those links are objectively the most relevant.
  • Inevitably, both the rules and any enforcement actions would end up being litigated in court, giving federal judges ultimate say over what exactly the law means.

A good gauge for determining how concerned a business is about imminent legislation is how apocalyptic its projections are about what the bill will do as reported by Wired.

Biggest tech companies 

By that standard, Big Tech is deeply troubled by the American Innovation and Choice Online Act.

As one of two antitrust bills voted out of committee by a strong bipartisan vote (the other would regulate app stores), it may be this Congress’ best, even only, shot to stop the biggest tech companies from abusing their gatekeeper status.

“It is the ball game,” says Luther Lowe, senior vice president of policy at Yelp and a longtime Google antagonist. 

“That’s how these guys stay big and relevant.

If they can’t put their hand on the scale, then it makes them vulnerable to small and medium-size companies eating their market share.”

Publicity push

But according to the tech giants and their lobbyists and front groups, the bill, which was introduced by Amy Klobuchar and Chuck Grassley, respectively the top Democrats and Republicans on the Senate Judiciary Committee, would be a disaster for the American consumer.

In an ongoing publicity push against it, they have claimed that it would ruin Google search results, bar Apple from offering useful features on iPhones, force Facebook to stop moderating content, and even outlaw Amazon Prime.

The legislation’s central idea is that a company that controls a marketplace shouldn’t be able to set special rules for itself within that marketplace because competitors who object don’t have any real place to go.

No business can afford to be left out of Google’s search index, and few online retailers can make a living if they’re not listed on Amazon.

So the Klobuchar-Grassley bill, broadly speaking, prohibits self-preferencing by platforms that hit certain size thresholds, like monthly active users or annual revenue.

Unspecified law

Beyond that, it’s difficult to say precisely what the law would do, because it leaves quite a bit unspecified.

And it gives the FTC, the Department of Justice, and state attorneys general the power to sue companies for violating those rules. 

The bill doesn’t mention Prime anywhere in the text.

Adam Kovacevich, the group’s CEO and a former Google public policy executive, says that the issue revolves around something called Fulfillment by Amazon, or FBA.

For those sellers to qualify for Prime shipping, they have to use FBA, meaning they have to store their inventory in Amazon’s warehouse and have Amazon handle two-day delivery.

No indication

It just says Amazon can’t force sellers to pay for its fulfilment program to get the Prime label.

If the bill became law, the company would have to let third-party sellers choose other logistics providers.

“What the bill would do in that case would be to force Amazon to develop a system on its marketplace so that sellers can choose alternative fulfilment partners, like DHL or FedEx or USPS or whatever,” says Sumit Sharma, a senior researcher at Consumer Reports. 

It gives no indication of when the program will reopen.

This helps explain why Amazon would oppose the bill.

Direct answers

“It actually is very good for Prime members because if this legislation passes, it means there will be competition for who can provide the best package delivery,” says Stacy Mitchell, the co-director of the ILSR.

As you’ve no doubt noticed, that has changed.

If you search for flights, you get Google’s flight-comparison tool.

An investigation by The Markup in 2020 found that “Google devoted 41% of the first page of search results on mobile devices to its own properties and what it calls ‘direct answers,’ which are populated with information copied from other sources, sometimes without their knowledge or consent.”

Google has not made a representative sample of search data publicly available.

Bad for users?

Google argues that this would simply make its search results worse.

A spokesperson directed me to a blog post by Kent Walker, the company’s president of global affairs and its chief legal officer.

Google has the right to make its search results worse than Yelp’s results.

But the theory of the self-preferencing bill, and indeed the entire tech antitrust movement, is that a company as dominant as Google doesn’t lose traffic even when another service offers higher quality—and that this is ultimately bad for users, who miss out on potentially better search results.

After all, in an open competition, the best offering should win.

Perhaps Big Tech really is the best at everything.

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Source: Wired 

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