Big Tech and the AICOA Act for Antitrust Reform

By The Fatty Fish Editorial Team - September 8, 2022

The AICOA Act has been introduced for Big Tech antitrust reform. Over the course of the last two decades, the Big Tech companies have implemented policies and infrastructure designs allowing them to significantly expand their influence. Big Tech’s growth was facilitated by a lenient and hands-off enforcement of antitrust laws, along with a US tech policy agenda focused on promoting tech innovation. Big Tech focused on quickly and assertively acquiring emerging competitors, utilizing the data obtained through surveillance and acquisitions to promote their own products and control. Their systems were intentionally designed to retain users by increasing the switching costs to alternative platforms. In addition, they established marketplaces where they competed directly, giving preference to their products over third-party competitors. Big Tech’s aggressive business strategy, largely funded by venture capital without the necessity for turning a profit or contributing meaningfully to the public good, is not a byproduct of innovation but a strategic approach to dominate the marketplace.

The American Innovation and Choice Online Act (AICOA) was reintroduced by Senators Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.), Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, would restore competition online by establishing common sense rules for dominant digital platforms to prevent them from abusing their market power to hurt competition, online businesses, and consumers. The AICOA antitrust reform Act includes:

Set clear, effective rules to protect competition and users doing business on dominant online platforms.
Give antitrust enforcers strong, flexible tools to deter violations and hold dominant platforms accountable.
Prevent self-preferencing and discriminatory conduct by the most economically significant online platforms with large U.S. user bases which function as “critical trading partners” for online businesses.

Apple, Google, and others have spent $95 million lobbying against a bill that would prevent them from favoring their own services. Here is an opinion piece we found of interest relating to Big Tech’s campaign to block the American Innovation and Choice Online Act.

Big Tech’s $95 Million Spending Spree Leaves Antitrust Bill on Brink of Defeat

In an opinion piece “Big Tech’s $95 Million Spending Spree Leaves Antitrust Bill on Brink of Defeat” for Bloomberg, Anna Edgerton, reporter, and Emily Birnbaum, reporter, examine how Alphabet Inc.’s Google, Apple Inc., Amazon.com Inc. and Meta Platforms Inc. along with their trade groups poured almost $95 million into lobbying since 2021 seeking to derail the American Innovation and Choice Online Act, which has advanced further than any US legislative effort to address the market power of some of the world’s richest companies. The authors suggest that failure of the American Innovation and Choice Online Act would prove to be a setback for politicians, activists and regulators who argue Silicon Valley has too much control over people’s lives. While for Big Tech, It would mark a huge win which has argued that the measure would weaken privacy, threaten national security and degrade products that consumers enjoy.

The authors report that the momentum for the bill is slowing is based on conversations with nearly two dozen of its supporters and critics, including policy experts, lobbyists, congressional aides and advocates. One Hill staffer summed it up as a do-or-die moment. “If supporters of this bill had enough votes, it wouldn’t be a bill, it would be a law,” said Matt Schruers, president of the Computer & Communications Industry Association, which represents the major tech companies. Read more on Bloomberg.

Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

The Fatty Fish Editorial Team

The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.