The United States lawmakers in June 2021 introduced five bills pertaining to Antitrust regulations for the purpose of curbing and curtailing the tremendous power in the hands of few big tech companies. The bills after being enacted will specifically deal with antitrust intricacies surrounding big technology giants across the nation. That means this bill is meant only for selected entities which fulfill the criteria of being a dominant technology enterprise. The entity must have a market capitalization of more than USD 600 Billion and it has to serve at least 50 Million U.S users or 1,00,000 U.S business each month. By terms of market capitalization, only 10 companies in the world come under this categorization namely – Apple (USD 2.3 Trillion), Microsoft (USD 2 Trillion), Saudi Aramco (USD 1.9 Trillion), Amazon (USD 1.7 Trillion), Alphabet (USD 1.5 Trillion), Facebook (USD 0.9 Trillion), Tencent Holdings (USD 0.8 Trillion), Tesla (USD 0.7 Trillion), Alibaba Group (0.7 Trillion), Berkshire Hathaway (USD 0.6 Trillion). The bipartite proposal comes under the motto “A Stronger Online Economy: Opportunity, Innovation, Choice” and was a result of 16-month long investigation conducted by Antitrust sub-committee of House Judiciary Committee under the leadership of Democratic Party Representative for Rhode Island David Cicilline (who also happens to be Antitrust Subcommittee chairman) in collaboration with Republican Ken Buck into some of the biggest tech corporations in the United States such as Amazon, Google, Apple and Facebook. The announcement of the proposed legislation was done by David Cicilline via his official twitter account through which he laid down in short the purpose of this bill. Ken Buck also exhibited his excitement towards the legalization of this bill. Various other legislative members took to twitter to stand up for the bill like representative Joe Neguse expressed his support in favour of the bill. The senator from Minnesota Amy Klobuchar (famous for her antitrust expertise) also tweeted the passing of the bill by the senate. The investigation concluded that these entities are dominant in their respective relevant markets. For instance, Facebook holds the monopoly status in social media applications while Google is a dominant entity in internet search market and Amazon is the biggest e-commerce platform having stronghold in retail online market. The regulators were of the view that these big corporations hold excessive power and act as a gatekeeper in their respective relevant markets thereby manipulating the market as per their whims and wishes. They charge exorbitant prices, eliminate small enterprises, coerce tough contractual obligations, draw out valuable data and use it for monetary gains. This as a result is causing harm, to small competitors, consumers and the overall market & prevailing economic conditions in general. They are also alleged for breaking laws and taking aggressive steps to maintain their monopoly status. As a matter of fact the five bills delve into the various antitrust arenas like big data, mergers and anti-competitive behaviour allegedly exhibited by these companies among others. So, let’s get down to each of these bills.
1.American Choice and Innovation Online Act – Led by David Cicilline, this act will keep a check on companies which try to manipulate market for their own good or for promoting their own products. Apart from this it will also prevent companies from excluding other products which fall in their line of business, discriminating between similarly placed business users, restricting business users’ access to services and violating any of the provisions stipulated in this act. In case of non-compliance of the provisions of this act, the penalty is stipulated at a fine of upto 15% of the company’s United States revenue for the previous calendar year or 30% of the company’s United States revenue for any line of business affected by the unlawful conduct.
2.Platform Competition and Opportunity Act – Led by Representative Hakeem Jeffries of New York, this act will stop big dominant entities from merging with smaller competitors or acquiring them. Basically the provisions mentioned therein will proscribe collaboration or alliance of such entities which compete with each other, fall in the same relevant market and the merger/acquisition of which will create a risk of forming a dominant entity in that relevant market. This act will make it tougher for entities to snap up their competitors for the ultimate purpose of killing the competition.
3.Ending Platform Monopolies Act – Led by Representative Pramila Jayapal of Washington DC, this can be construed as the most important bill among all the 5 bills. This act will prohibit the company from unfairly favoring its own product over competitors on its platform. For instance, Google gives its own services greatest priority at the top of a search results page — the reason Google Maps and reviews appear first on searches for local businesses and YouTube tops those for music or video. Further, it was observed by the lawmakers that these dominant companies often steer away users to their own products instead of showing the true search results as asked. The provisions contained in this act would prevent this self-preferencing habit of entities to avoid creation of any conflict of interest.
5.Merger Filing Fee Modernization Act – Led by Representative Joe Neguse of Colorado, this act aims to provide a greater monetary support and resources to the Federal Trade Commission and Department of Justice so that as to help them efficiently perform the work they are supposed to perform. The fees is stipulated as per the total combined valuation or size of the transaction. If the combined valuation is USD 92 Million to 184 Million, then the fee would be between USD 30,000 to 40,000. If the valuation is between USD 184 Million to 919 Million, then fees would be USD 1,00,000 to 1,25,000. And if the merger value crosses more than USD 919 Million, the fees would be USD 2,50,000 to 2,80,000. Thus it will serve the purpose of greater flexibility, collection of required intel and operational resources by boosting the fund for these two US antitrust enforcers/regulators.
MAIN OBJECTIVE BEHIND THIS STEP
The main objective behind such initiative is to level the playing field for all the players (whether small or big) and ensure these dominant technology players play by the same rules. The main target of these proposed legislations are those technology enterprises which come under the category of dominant position. It aims at the most profitable ventures of all these tech companies including Amazon’s The lawmakers want to break big tech, split it into various pieces, dismantle their structure and prevent them from unfairly favoring their own products over the competitors on their platforms. Also, by way of this legislation the big technology enterprises will face a huge difficulty in merging or forming alliances with competitors no matter their size.
Considering the stringent provisions and ever-increasing scrutiny, these bills hold the power to shake the tech behemoths from deep beneath their structures. The bills are now in preliminary stage and hence will be sent to House Judiciary Committee and after that to both the House i.e Senate (Upper House) and House of Representatives (Lower House). If passed by both these houses, then the President Joe Biden will sign the bill making it a law of the land at United States. The final voting will be held on June 23rd 2021. Post legalization this bill would reshape the governance and operation of tech companies so that there is strict abidance of the prescribed rules and regulations. This move could revolutionize the United States technology industry in a manner never seen before.