Examining the American Innovation and Choice Online Act
Congress has been considering legislation that would mark the most significant change to antitrust law in a generation. At issue is whether the bills would increase competition in digital markets, and what impacts may be anticipated. A recent comment letter from the American Bar Association Antitrust Law Section, the world’s largest professional organization for antitrust and competition law and consumer protection, discussed one of those bills, the American Innovation and Choice Online Act (S. 2992), at length in an effort to assist with ongoing consideration of the measure.
The International Center for Law & Economics (ICLE) hosted a May 19 digital event (video is embedded above) with two experts to discuss recent proposed legislative changes to current antitrust law, and S. 2992 in particular. Will such bills increase competition in digital markets and what consequences might they have? ICLE Founder and President Geoffrey A. Manne moderated the virtual panel and we joined by guests Sean Sullivan, an associate professor of law at the University of Iowa and member of the ABA Antitrust Law Section, and Elyse Dorsey, visiting scholar at the University of Virginia and adjunct professor at Antonin Scalia Law School at George Mason University.
As deliberations on the legislation continue, we also recommend reading the following ICLE resources:
- Aurelien Portuese, “The Road to Antitrust’s Least Glorious Hour”
- Friso Bostoen, “Waking up to Platform Regulation”
- Stephen Dnes, “The Four Ways of Spending Data”
- Lazar Radic, “A Day in the Fair New World of Perfectly Open Platforms”
- Dirk Auer, “Woman in the High Office”
- Ramsi Woodcock, “Verses on Self-Preferencing”
- Julie Carlson, “Antitrust Populists Don’t Seem to Care About the Poor”
- Filip Lubinski & Lazar Radic, “New Frontiers of Fairness”
- Geoffrey Manne, “The Catch-22 of AICOA’s Guidelines”
- Alden Abbott, “The Bitter Fruits of Federal Antitrust ‘Reform’ Legislation”
- Dan Crane, “Winter in Helsinki”
- Thom Lambert, “AICOA Is Neither Urgently Needed Nor Good: A Response to Professors Scott Morton, Salop, and Dinielli”
- Brian Albrecht, “Confusion Can Make for Good Politics, but Bad Economics”
- Brian Albrecht & Geoffrey Manne, “A New Bill for Big Tech, with the Same Flaws”
- Geoffrey Manne, “How Tech Startups Could Be a Casualty of the War on Self-Preferencing”
- Lazar Radic & Geoffrey Manne, “The ABA’s Antitrust Law Section Sounds the Alarm on Klobuchar-Grassley”
- Brian Albrecht, “The American Innovation and Choice Online Act Would Foster Neither Innovation Nor Choice”
- Alden Abbott, “Suggested Redline Edits to the DOJ’s Letter to Judiciary Committee Leadership”
- Dirk Auer, “10 Things the American Innovation and Choice Online Act Gets Wrong”
- Samuel Bowman, “U.S. Senate Self-Preferencing Bill Offers Perfect Recipe for Regulatory Overreach”
- Samuel Bowman & Brian Albrecht, “A Big Tech Crackdown Could Just Make the Internet Worse”
- Samuel Bowman & Geoffrey A. Manne, “tl;dr – Platform Self-Preferencing: Benefits to Consumers and to Competition”
- Samuel Bowman & Geoffrey A. Manne, “5 Thoughts on the Senate’s Proposed Platform Self-Preferencing Ban”
- Samuel Bowman, “Breaking Down the American Choice and Innovation Online Act”
- Eric Fruits & Geoffrey Manne, “The Klobuchar Bill’s Not-So-Bright Lines for Antitrust Scrutiny”
- Samuel Bowman, “Breaking Down House Democrats’ Forthcoming Competition Bills”
- Samuel Bowman & Geoffrey Manne, “Platform Self-Preferencing Can Be Good for Consumers and Even Competitors”
- Geoffrey Manne, “Against the Vertical Discrimination Presumption”
And finally, we offer this Twitter thread from ICLE Senior Scholar Lazar Radic, summarizing some of the key points made by the panelists during the May 19 event.
The @abaantitrust's recent letter on the American Innovation and Choice Online Act was a major subject of @LawEconCenter's virtual panel w/@geoffmanne, @sullivan_sean_p of@uiowa, & Elyse Dorsey of @georgemasonlaw & @UVALaw.
— Lazar Radic (@laz_radic) June 1, 2022
1/19 Here's a 🧵on the key take-aways for AICOA which might also be relevant for other tech regulation currently on the table.https://t.co/MFCn4hEB4x
— Lazar Radic (@laz_radic) June 1, 2022
2/19 First: the @ABANews doesn't often comment on proposed legislation and when they do, their observations tend to be restrained. Moreover, @abaantitrust is a heterogeneous section, with prosecutors, corporate counsel, academics, etc, from a broad swath of perspectives.
— Lazar Radic (@laz_radic) June 1, 2022
3/19 So it is particularly noteworthy that, in responding to AICOA, the section found consensus to offer language that constituted a fairly harsh critique of the bill.https://t.co/qs5zmQHQPA
— Lazar Radic (@laz_radic) June 1, 2022
4/19 Among the points made forcefully in the section's letter was that, rather than complementing U.S. antitrust law, much of the language used in AICOA may be incompatible with the meaning and purpose of existing law.
— Lazar Radic (@laz_radic) June 1, 2022
5/19 For example, it's unclear what terms like "materially," "fair," "preferencing" and "harm to competition" mean or how they fit with the existing legal framework. These are not minor issues, but key terms for providing clarity to the courts. https://t.co/qwfgwvXzhP
— Lazar Radic (@laz_radic) June 1, 2022
6/19 Moreover, terms like "discrimination" and "fairness" have historically proven contested in the context of antitrust. Courts have repeatedly struggled to define, e.g., "fair competition." https://t.co/sN2hKmlVwe
— Lazar Radic (@laz_radic) June 1, 2022
7/19 The bill also suggests that it offers solutions to problems that its proponents have not convincingly demonstrated to actually exist. This is, of course, a recurrent theme in tech regulation. https://t.co/Qv08sDWw5K
— Lazar Radic (@laz_radic) June 1, 2022
8/19 For example, if Congress intends to reverse the Supreme Court's Trinko ruling on duty to deal, it should at least be clear why the Big Tech platforms targeted by AICOA should be the only parties with such a duty. https://t.co/QkInh8KgoZ
— Lazar Radic (@laz_radic) June 1, 2022
9/19 It is also uncertain why the common business practice of "self-preferencing" is only apparently harmful when tech platforms do it. If it is inherently "unfair," why not prohibit it across the board? https://t.co/uz87ASxQM6
— Lazar Radic (@laz_radic) June 1, 2022
10/19 We also should interrogate the bill's impact on privacy. Imposing on companies duties to share user data raises security concerns. It also could undermine innovative "closed" ecosystems that are privacy enhancing, like Apple's. https://t.co/RqQD64tlPZ
— Lazar Radic (@laz_radic) June 1, 2022
11/19 Indeed, imposing these widespread duties to deal, as well as prohibitions of self-preferencing, may very well lead to a more homogenized market where, for example, Apple products look more like Google's. https://t.co/IrOry0vu8e
— Lazar Radic (@laz_radic) June 1, 2022
12/19 This is what @LawEconCenter argued in our amicus brief in Epic v Apple: systems-level competition is what matters. It does not advance competition to force platforms to implement essentially the exact same business model. https://t.co/zLaqu3yGP7
— Lazar Radic (@laz_radic) June 1, 2022
13/19 The district court also recognized as much in Epic Games v. Apple. pic.twitter.com/fvvI68grUg
— Lazar Radic (@laz_radic) June 1, 2022
14/19 Also relevant is the recent trend toward settlements in antitrust litigation, which could shift power to the @FTC and @JusticeATR and away from the courts. This is of particular concern when terms are not well-defined in the law. https://t.co/qOU83FpaKP
— Lazar Radic (@laz_radic) June 1, 2022
15/19 Further, when terms are not well defined in the law and when cases rarely reach the courts, they may end up being defined by rent-seeking firms looking to hurt competitors – not to benefit competition or consumers.
— Lazar Radic (@laz_radic) June 1, 2022
16/19 Among the areas lacking clarity are what affirmative defenses are available to the 10 offenses spelled out in AICOA. Of those 10, 7 don't require a showing of harm (only of conduct) and therefore don't offer any obvious defense. https://t.co/lWffdxI6aC
— Lazar Radic (@laz_radic) June 1, 2022
17/19 The other 3 offenses require showing "material harm" to competition, which is similarly ill-defined. One possibility we at @LawEconCenter have entertained is that this vague language seeks to resuscitate a "harm to competitors" standard. https://t.co/ZolrkYnTb3
— Lazar Radic (@laz_radic) June 1, 2022
18/19 Language used by supporters of the bill, such as references to helping "small businesses", lends color to this theory. pic.twitter.com/7TFw8rF9Zr
— Lazar Radic (@laz_radic) June 1, 2022
It's still uncertain what AICOA would and would not allow, including such popular services as @amazon Prime. What's particularly unfortunate is that this uncertainty would affect the fastest-moving and most innovative sectors the most. /endhttps://t.co/OxOaWtdNtN
— Lazar Radic (@laz_radic) June 1, 2022