American Innovation and Choice Online Act

The American Innovation and Choice Online (AICO) is a proposed antitrust bill in the United States Congress. The legislation was introduced by David Cicilline (D-RI) in the House of Representatives as the American Choice and Innovation Online Act (H.R. 3816) on June 11, 2021.[1] On October 14, 2021, companion legislation in the Senate was introduced by Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) as S.2992.[2]

American Innovation and Choice Online Act
Great Seal of the United States
Long titleTo provide that certain discriminatory conduct by covered platforms shall be unlawful, and for other purposes.
Announced inthe 117th United States Congress
Number of co-sponsors45
Legislative history

The legislation aims to prevent Big Tech companies from "self-preferencing" their own products at the expense of competitors.[3] Under AICO, covered platforms would be forbidden from disadvantaging other companies' products or services. The legislation would also prohibit covered platforms from using non-public data collected from business users to unfairly advantage the platforms' own products.[4]

On June 24, 2021, the House Committee on the Judiciary advanced H.R. 3816 on a 24–20 vote.[5] On January 20, 2022, the Senate Committee on the Judiciary voted to advance the legislation in a 16–6 vote.[6]

Background

Following a sixteen-month investigation, the House Committee on the Judiciary released a 450-page report in 2020 alleging that Big Tech companies have engaged in anti-competitive conduct.[7]

According to Cicilline, both AICO and five accompanying pieces of antitrust legislation approved by the House Committee on the Judiciary in June 2021 were borne out of the report's findings.[8]

Provisions

The legislation is a bipartisan attempt to promote fair competition on the Internet by implementing new rules to prevent large tech companies from "abusing their market power to harm competition, online businesses, and consumers," according to a statement by Sens. Klobuchar and Grassley.[2]

Under the House legislation (H.R. 3816), AICO would forbid covered platforms from:

  • "Self-preferencing" their own products at the expense of competitors
  • Intentionally disadvantaging other firms' products or services
  • Using non-public data generated by a business user to advantage the covered platform's own products
  • Interfering with pricing decisions set by another business user

The legislation would also prohibit covered platforms from retaliating against a business user that notifies law enforcement about the activities of covered platforms.[4] If passed, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) would be responsible for determining which platforms are "covered platforms" subject to AICO, and would be tasked with enforcement of the law.[9]

Penalties

H.R. 3816 specifies penalties for covered platforms that violate AICO. Failure to comply with the law would result in fining the offending platform up to 15% of their U.S. revenue in the prior calendar year or up to 30% of their U.S. revenue for any one line of business harmed by their actions. Violation of AICO would additionally result in restitution as well as disgorgement.[4]

Companies affected

If enacted, only companies with 50 million or more monthly users in the U.S. and a market capitalization of at least $600 billion would be governed by the provisions of AICO.[3] According to reporting by Axios, AICO would prevent Apple and Google's Android from setting "prices and policies for their app stores that rivals have complained make them lose business and revenue". The legislation also aims to prevent Amazon from "self-preferencing" their own products at the expense of those sold by third parties.[10]

Impact on cybersecurity

According to Richard Stiennon, the chief research analyst at cybersecurity company IT-Harvest, AICO would not prevent covered platforms from investing in cybersecurity measures. Stiennon noted that Google would be able to block phishing efforts on Gmail, and would similarly be permitted to continue scanning apps submitted to its Google Play store.[6]

Legislative history

As of September 28, 2022

Congress Short title Bill number(s) Date introduced Sponsor(s) # of cosponsors Latest status
117th Congress American Innovation and Choice Online Act. H.R.3816 June 11, 2021 David Cicilline (D-RI) 47 Referred to Committees of Jurisdiction.
S.2992 October 18, 2021 Amy Klobuchar (D-MN) 13 Referred to Committees of Jurisdiction.

House of Representatives

H.R. 3816 was introduced by Cicilline on June 11, 2021, with fellow Democrat Jerry Nadler (D-NY) and Republicans Ken Buck (R-CO) and Lance Gooden (R-TX) as original cosponsors.[9] On June 24, 2021, the House Committee on the Judiciary voted to advance the legislation in a 24–20 vote.[5] The legislation has not received a floor vote in the full House of Representatives.[11]

Senate

S.2992 was introduced as a companion bill to H.R. 3816 by Klobuchar and Grassley on October 14, 2021.[2] On January 20, 2022, the Senate Committee on the Judiciary voted in favor of advancing the legislation in a 16–6 bipartisan vote.[6] The industry fought against the bill with "an aggressive lobbying blitz" according to the Washington Post.[6]

According to reporting by Politico, Senate Majority Leader Chuck Schumer has indicated that he will bring the legislation to a floor vote should it appear that there will be 60 votes in its favor.[12]

See also

References
  1. "H.R.3816 - 117th Congress (2021-2022): American Choice and Innovation Online Act". United States Congress. 2021-06-24. Retrieved 2022-04-19.
  2. "Klobuchar, Grassley, Colleagues to Introduce Bipartisan Legislation to Rein in Big Tech". U.S. Senator Amy Klobuchar. Retrieved 2022-02-28.
  3. Ghaffary, Shirin (2021-06-11). "What you need to know about the House's opening bid to rein in Big Tech". Vox. Retrieved 2022-02-28.
  4. "House antitrust subcommittee unveils five big tech antitrust bills". Reuters. 2021-06-14. Retrieved 2022-02-28.
  5. Schaal, Dennis (2021-06-24). "There Is A Good Chance Google Travel's Ambitions Are About To Be Reined In, Legislatively". Skift. Retrieved 2022-02-28.
  6. Zakrzewski, Cat; De Vynck, Gerrit (January 20, 2022). "Senate advances antitrust legislation, despite reservations from California Democrats". Washington Post.
  7. Knox, Ron (June 25, 2021). "How Washington got back into trustbusting". Washington Post.
  8. "Cicilline Applauds Senate Judiciary Committee Passage of the American Innovation and Choice Online Act | Congressman David Cicilline". cicilline.house.gov. 20 January 2022. Retrieved 2022-02-28.
  9. "All Info - H.R.3816 - 117th Congress (2021-2022): American Choice and Innovation Online Act". www.congress.gov. 2021-06-24. Retrieved 2022-02-28.
  10. Gold, Margaret Harding; McGill, Ashley (11 June 2021). "Congress unveils bills to dismantle tech giants". Axios. Retrieved 2022-02-28.
  11. Scarborough, Michael W.; Costello, Kevin (November 2, 2021). "Senate Zeros in on Big Tech with Latest Antitrust Reform Bill". The National Law Review. Retrieved 2022-02-28.
  12. Birnbaum, Emily; Nylen, Leah (March 10, 2022). "Schumer's message to antitrust advocates: Bring me 60 votes". POLITICO. Retrieved 2022-04-17.
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