Few bills in recent memory have been as misleadingly titled as the ‘American Innovation and Choice Online Act,’ writes Michael BloombergI have always believed we need more bipartisanship in Washington, but just because an idea is bipartisan doesn’t make it good. A bill now making its way to the Senate floor is a perfect example.
At the heart of the bill is an effort to prevent big tech companies from using a widespread business practice called self-preferencing, which is generally good for both consumers and competition. Think of it this way: An ice-cream parlour makes its own flavours and sells other companies’ flavours, too. Its storefront window carries a large sign advertising its homemade wares. In smaller letters, the sign mentions that Haagen-Dazs and Breyers are available, too.
Yet the bill views such standard business conduct as harmful. It would require covered companies — essentially Amazon, Apple, Google, Facebook and TikTok — to prove that any new instance of preferencing would “maintain or enhance the core functionality” of their business. Failure to comply could lead to fines of up to 15% of a company’s total US revenue over the offending period.
Is crushing Amazon Prime really what Congress thinks the American people want? The bill’s supporters claim that some tweaks were made to ensure that Prime won’t actually be banned. But what about the next company that wants to offer an innovation like Prime? And what about all the other economic and consumer benefits the bill could effectively outlaw?
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