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Senate AICOA Bill Falls Short in Analyzing the Reality of Digital Markets, Argues New Report from PPI

06.28.2022

Today, the Progressive Policy Institute released a new report exploring how antitrust law and policy applies to the modern U.S. technology sector and examining the issues at play in the debate over the Senate’s broad and potentially harmful antitrust legislation. The report is titled “Applying Antitrust Law to the U.S. Tech Sector: A Critique of the American Innovation and Choice Online Act,” and is authored by PPI Technology Policy Analyst Malena Dailey.

“The American Innovation and Choice Online Act is not based on sophisticated economic analysis of how digital markets work. The size-based, company-specific approach fails to account for the reality of the global market for online platforms, and is a departure from the precedent of assessing market power prior to imposing rules associated with competition,” writes Malena Dailey in the report.

The report dives deep into the history of U.S. competition policy, and outlines the shift in theories surrounding antitrust enforcement since the 1970s. The ways in which the Klobuchar-Grassley-led S. 2992 — the American Innovation and Choice Online Act — misaligns with current antitrust enforcement could have unintended consequences if enacted, such as limiting U.S. technology leadership, overregulating a fluctuating global market, and unfairly singling out four of America’s most successful companies.

“There is a demonstrated need for changes in how antitrust law is enforced in order to encompass the impact of digital platforms and e-commerce. However, the Senate bill fails to offer a rigorous economic analysis of digital markets, fundamentally changing enforcement methods in ways unacknowledged by the bill’s supporters,” Ms. Dailey argues about S. 2992.

The report explores three ways in which S. 2992 falls short in responding to concerns regarding competition, arguing that this bill fails to assess “Big Tech’s” market power and alleged quantifiable harm to consumers, puts American companies at a competitive disadvantage against other big competitors in global markets — notably, giving China the upper hand in technology leadership — and establishes overly broad, potentially damaging standards.

Read and download the full report:

 

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

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Media Contact: Tommy Kaelin; tkaelin@ppionline.org