Experts warn Big Tech antitrust bills could 'shackle innovation and hurt consumers'
More than 6,000 people have signed a letter to Congress expressing concern with the new bills
Antitrust legislation faces pushback from tech industry
Rep. Ro Khanna, member of the House Armed Services Committee, calls for more thoughtful antitrust legislation. He argues that there is a 'lack of knowledge' on the subject within Congress.
As bipartisan lawmakers push antitrust bills targeting Big Tech companies, experts are warning that the legislation could potentially harm innovation and consumers.
The House Judiciary Committee on Wednesday, led by Rep. David Cicilline, D-R.I., began to mark up a package of six bills designed to rein in the power of Amazon, Apple, Facebook and Google by prohibiting tech behemoths from acquiring promising startups that could later become potential rivals, among other things. The panel finally approved the package Thursday.
However, experts are warning of the unintended consequences of passing such sweeping antitrust legislation.
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"Bills under review, as currently drafted, would condemn outright specified business practices and acquisitions by big digital platforms, without any inquiry into the facts on hand," former Federal Trade Commission (FTC) general counsel and Mercatus Center senior research fellow Alden Abbott said in a Thursday statement. "As such, they would outlaw and disincentivize a great deal of behavior that may benefit consumers and drive innovation."
He added that the bills would "turn enforcers into regulators," which would slow innovation and spawn "economic inefficiency, to the detriment of the American economy."
In this Feb. 5, 2021 photo, an Apple store employee wears personal protective equipment in New York. (AP Photo/Mark Lennihan)
Jessica Melugin, director of the Center for Technology and Innovation at the Competitive Enterprise Institute (CEI), called the bills "a massive regulatory expansion into one of the most dynamic, complex and successful sectors of the U.S. economy."
"This legislation would shackle innovation and hurt consumers. Republicans are realizing that all of that cost won’t come with any benefit to their speech concerns with Big Tech," she said in a statement.
The Center for Growth and Opportunity’s Will Rinehart took issue with lawmakers' approach to passing the legislation.
"Members from both sides of the aisle aired concerns since the bills were just introduced two weeks ago and were pushed through committee without hearings," he said in a statement, adding that "Congress should consider tweaking antitrust laws and should give agencies more staff to bring cases."
"But the irregularities of this process clearly show that Democratic leadership wants to score points, not get the laws right," he continued.
George Mason University and its Mercatus Center have accepted donations from Google; CEI has accepted donations from Amazon and Google.
In addition, more than 7,000 people identified as small-business owners and supporters signed a letter to Congress expressing concern with the new bills, arguing that some small businesses are dependent on tech giants like Amazon and Apple to succeed.
"We understand there are headlines to be made in attacking large companies, but during the pandemic, Google, Amazon and other American technology leaders helped small businesses survive," the letter reads. " … We did not ask you to spend precious time and taxpayer dollars going after companies that help small businesses."
They ask lawmakers not to "play politics in the name of competition" and instead "talk to small businesses that rely on the scale, security and low prices digital tools and services provide to help with recovery and find success."
Jake Ward, president of the Connected Commerce Council (3C) – a nonprofit aimed at connecting small business with digital technologies and tools – said in a Tuesday statement that the U.S. does not "need new laws or to rush legislation" and "ought not vilify American technology leaders whose products and services have saved millions of American small businesses and tens of millions of American jobs during the COVID-19 pandemic."
Ward spoke out during the House Judiciary Committee’s markup of the legislation on Wednesday.
Another letter signed by a coalition of free-market and other conservative groups, including Americans for Tax Reform, the 60 Plus Association, the Committee for Justice, Independent Women’s Voice, and National Taxpayers Union, says the legislation is "neither a conservative nor free-market approach" to combatting antitrust issues "and would stifle the robust competition that guarantees the best products and lowest prices for every American."
A number of the signatories have accepted donations from Google, Facebook and Amazon.
The bills being voted on this week are the result of a 16-month, bipartisan investigation, which concluded that Amazon, Google, Apple and Facebook abused their market power by charging exorbitant fees, imposing oppressive contract terms and extracting data from people and businesses that rely on them.
The four companies repeatedly have denied abusing their market power and have argued the legislation could prevent the companies from running popular services and hurt small businesses.
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If Congress ultimately passes the antitrust bills – a heavy lift, despite the widespread agreement over the need to crack down on tech giants – it would mark one of the biggest industry shake-ups in decades, since the federal government in 2001 accused Microsoft of illegally bundling its web browser, Internet Explorer, with its market-dominating Windows operating system.
Some small business owners, including app creators and e-commerce businesses, have argued that Big Tech companies have created an unfair playing field and drown out competition.
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In January 2020, for example, Sonos CEO Patrick Spence, Popsockets founder David Barnett, Tile Vice President Kirsten Daru and Basecamp CTO David Heinemeier Hansson spoke out against the four Big Tech companies at a House antitrust subcommittee hearing.
The executives detailed personal experience with Google's search engine and advertising dominance, Facebook's privacy problem in relation to targeted advertising, Amazon's massive counterfeit problem, and Apple's stifling App Store practices. These anti-competitive behaviors, according to the executives, have made it harder for tech startups to develop and become successful.
Republicans have long argued that Big Tech companies, including Google, Facebook and Amazon, have suppressed conservative content and hope that antitrust legislation could quell the companies' power and regulatory decisions.
FOX Business' Megan Henney contributed to this report.