Amazon not happy with antitrust law targeting Amazon
We assume the world's smallest violin is available right now on Prime
Updated Amazon has blasted a proposed antitrust law that aims to clamp down on anti-competitive practices by Big Tech.
The American Innovation and Choice Online Act (AICOA) led by Senators Amy Klobuchar (D-MN) and House Representative David Cicilline (D-RI) is a bipartisan bill, with Democrat and Republican support in the Senate and House. It is still making its way through Congress.
The bill [PDF] prohibits certain "online platforms" from unfairly promoting their own products and services in a way that prevents or hampers third-party businesses in competing. Said platforms with 50 million-plus active monthly users in the US or 100,000-plus US business users, and either $550 billion-plus in annual sales or market cap or a billion-plus worldwide users, that act as a "critical trading partner" for suppliers would be affected.
In practice, it would mean Amazon would not be able to push its own products and those sold by vendors that have signed up to its Fulfillment by Amazon program to the detriment of other sellers. Businesses hawking fare via FBA pay the e-commerce giant to store and package their goods in Amazon's warehouses. In return, Amazon ranks these items more highly on its website and sends them to consumers more quickly using its Prime delivery service.
Amazon argued the law, if passed, would mean it'd have to open up its Prime service to third party providers that can also deliver goods. "Senator Klobuchar's vaguely worded bill would mandate that Amazon allow other logistics providers to fulfill Prime orders," the company's veep of public policy Brian Huseman said in a statement on Wednesday.
"Such a mandate would make it difficult, and potentially impossible in practice, for Amazon and our selling partners to offer products with Prime's free two-day shipping (let alone one-day)."
Huseman wanted to remind Congress its FBA program supports over 1.8 million jobs, including people at small businesses, and the one million workers employed to work at its warehouses and delivery network. It also criticized the AICOA for unfairly targeting Amazon while sparing similar retail giants like Walmart or Target.
"Oddly, and inappropriately, this legislation is targeted at only one US retailer — Amazon," Huseman said. He claimed Walmart, which has an online marketplace, "had annual revenues of $559 billion, nearly $90 billion more than Amazon," and yet was excluded from the rules due to the maze of qualifying conditions.
Other competitors with online souks also said to be exempt, according to Amazon, were: CVS, which had annual revenues of $292 billion; Costco, which did $196 billion; and Target, based in Senator Klobuchar's home state of Minnesota, which recorded $106 billion.
(Huseman wrote that Amazon was being singled out due to the AICOA "requiring a market value of at least $550 billion to qualify for regulation," though our reading of the legislation right now is that an online platform needs to have at least $550 billion in annual sales or market cap to trigger that part of the requirements, and Walmart at $559 billion in revenue just about qualifies. Whether Walmart fulfills all the requirements remains to be seen.)
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Senator Klobuchar revised the bill slightly last week after hearing concerns from both Republicans and Democrats, Politico reported. There was a fear, pushed by tech lobbyists, it's reported, that the sweeping powers could affect things like Google Docs and Amazon Prime, and some Democrat senators believed it all may backfire on them in the mid-term elections. Meanwhile, Dem leaders hope to push the bill to a vote by summer.
Though voters may be in favor of cracking down on Big Tech and loosening its grip, this isn't as much a priority right now as inflation and job security, judging from some polling.
"If Congress believes that the highly competitive retail industry needs regulation, we welcome the opportunity to engage in identifying and addressing legitimate concerns lawmakers may have," Amazon's Huseman added. "But the proposed bills that Congress is now considering, which attempt to broadly cover five companies, each with a vastly different business model, should be reconsidered."
The Register has asked representatives from Senator Klobuchar's office and House Representative Cicilline's office for comment.
The US Chamber of Commerce's chief policy officer Neil Bradley said in a statement of the revised version: "This legislation would irreparably harm the American economy and innovation.
"It fails to address bipartisan concerns that it would undermine our national security, cybersecurity, privacy, and international competitiveness — and harm consumers. Such an approach will fuel further inflation, limit choices, and undermine investment in innovation by injecting regulatory uncertainty into the marketplace at the worst possible time." ®
Updated to add
"Who do you trust? The largest online retailer in America with a demonstrated record of stiffing small businesses and lying about this bill's impact, or small businesses themselves?" a spokesperson for Senator Klobuchar told The Register.
"Take Small Business Rising, a group of businesses from around that country, which said that this bill 'is a critical part of the solution to the harms caused by the outsized power of the tech giants' or the National Association of Wholesale Distributors, which represents 30,000 employers and said if this bill is not advanced, competition and innovation will continue to be suppressed to the detriment of consumers and small-and medium-sized business.'
"Or the Main Street Alliance, which said that the bill is a 'win for small businesses'. We'll take the side of small business and consumers – not the side of big tech monopolists."