The Clock is Running Out on Antitrust Legislation | Citizens Against Government Waste

The Clock is Running Out on Antitrust Legislation

The WasteWatcher

      Since the beginning of the 117th Congress, there has been an effort to pass radical changes to antitrust law.  There have been a variety of bills introduced, but S. 2992 and H.R. 3816, the American Innovation and Choice Online Act, introduced by Sen. Amy Klobuchar (D-Minn.) and Rep. David Cicilline (D-R.I.), have become the center of attention in this area.  Like the action taken by Federal Trade Commission (FTC) Chair Lina Khan on July 1, 2021, announcing that the agency would abandon the consumer welfare standard, the Klobuchar-Cicilline bill also disregards what is best for consumers and unfairly target specific companies, which will lead to higher prices and less choice for customers.

            The Council for Citizens Against Government Waste (CCAGW) expressed its opposition to H.R. 3816 and other antitrust bills before the House Judiciary Committee as it considered and then approved several of the bills in June 2021.  CCAGW also sent a letter to the Senate Judiciary Committee opposing S. 2992 on October 19, 2021, the day after it was introduced by Sen. Klobuchar.  Continued objections to antitrust legislation were raised, including a second letter to the Judiciary Committee on January 20, 2022, including concerns about how the changes in antitrust law would extend across other industries.  S. 2992 was voted out of the committee on March 2, 2022, and since then Sen. Klobuchar has claimed that the bill has enough supporters for Senate Majority Leader Sen. Chuck Schumer (D-N.Y.) to bring the bill up for a vote.  Despite such claims, none of the antitrust bills have been brought to the floor for a vote in either the House or Senate since being cleared by their respective committees.   

            Despite its name, the American Innovation and Choice Online Act will stifle innovation, leading to fewer choices and increased prices for consumers.  The bill would prohibit “self-preferencing” by large tech companies like Amazon, Facebook, and Google.  For example, when consumers shop on Amazon, cheaper options sold under the AmazonBasics label would no longer be allowed to be displayed near the top of the search results.  Proponents of the bill claim that these large companies have an advantage over smaller manufacturers by giving their own private label products a more prominent spot at the top of search results, apparently unaware that small manufacturers make most of the products that are sold under these private labels.  There is no “advantage” over competitors by offering products at a lower price.  And it turns out that Amazon is dropping many of its private labels because they are not selling as well as other products, which means the marketplace is working without the need for government intervention.

            Perhaps the main reason that neither S. 2992 nor H.R. 3816 has been considered on the floor of either chamber is that neither party is unified in its position on the legislation, leading to some strange bedfellows.  S. 2992 has six Republican co-sponsors, including Sen. Josh Hawley (R-Mo.) who has expressed his desire to punish so-called “Big Tech” companies for their perceived treatment of conservative views on their platforms.  On the other side of this issue, Sens. Rand Paul (R-Ky.) and Diane Feinstein (D-Calif.), along with lawmakers who represent California and Silicon Valley, oppose the bill.  Leader Schumer has said he plans to hold a vote on S. 2992 following Congress’s August recess, but with the midterm elections nearing, lawmakers will start spending more time on the campaign trail and less time in Washington.  Holding a vote on a bill that splits both parties, has little public momentum or sentiment behind it, and has no guarantee of success in either chamber, will be tough to pull off.

            Among the dangerous changes to antitrust law included in S. 2992 is providing FTC Chair Lina Khan more opportunities to wreak havoc on the economy.  Chair Khan has made it her mission to increase antitrust enforcement, especially in the tech industry, and expand the power and scope of the FTC beyond its original mission.  Needless to say, she has become very adept at taking advantage of Congress’s inability to agree on bills that impact consumers.  The latest example of Chair Khan overreaching her agency’s powers was on August 10, 2022, when she pushed forward a proposed data privacy rulemaking in absence of congressional action, even though Congress is currently working on legislation to address consumer data privacy law.  It is critical for Congress, not the FTC, to carefully craft a nationwide privacy framework.  However, if Congress passes these antitrust bills, they will be giving a green light to Chair Khan to continue her overreaching and potentially illegal rulemaking and regulations.

            Democrats and a few Republicans have been pushing for antitrust legislation that would radically change decades of antitrust law in the U.S.  These bills abandon the consumer welfare standard and inevitably will lead to less innovation, higher prices, and fewer choices for consumers.  They supposedly target the tech industry, but if Congress passes these so-called antitrust reforms or otherwise relinquishes its responsibility over these issues to the FTC, no industry will be safe from overreaching government regulation and interference.  Thankfully, the clock is ticking, and the horn may sound before Congress can hold a vote on these damaging bills. 

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