The Need for Balanced Policy Action that Fosters Competition and Innovation
Antitrust law—also known as competition law—exists to benefit consumers by fostering healthy marketplace competition. Competition drives innovation, helps control prices, and provides choice in the marketplace.
Congress passed the nation’s first antitrust law—the Sherman Act—in 1890. The Sherman Act, along with the Federal Trade Commission Act and the Clayton Act (both from 1914), form the foundation of U.S. antitrust law. The FTC and the U.S. Department of Justice are responsible for enforcing these laws.
There is now growing concern worldwide among governments, businesses, and the public about competition in the technology sector. In the U.S., the FTC and DOJ, as well as several states, have filed antitrust lawsuits against several large tech companies, including Amazon, Facebook, and Google. These suits allege that these companies engage in anticompetitive practices that hurt small businesses, consumers, and the economy, and hamper innovation.
Congress Advances Antitrust Legislation
In Congress, there is bipartisan support for legislation to promote competition in the technology sector and curb anticompetitive actions. If enacted, the following two bills would represent positive paths forward for strengthening competition and innovation in the tech sector:
- American Innovation and Choice Online Act — This bipartisan bill would prohibit specified acts for certain large online platforms, including giving preferences to their own products on their platforms and limiting the availability of competing products. This bill advanced out of the Senate Judiciary Committee by a wide bipartisan vote of 16-6.
- Open Apps Market Act — This bipartisan bill would prohibit certain large technology companies from requiring developers to use an in-app payment system owned or controlled by the company as a condition of distribution or accessibility; requiring that pricing or conditions of sale be equal to or more favorable on its app store than another app store; or taking punitive action against a developer for using or offering different pricing terms or conditions of sale through another in-app payment system or on another app store.
It is possible that these bills and other antitrust proposals will be combined into a single bill. Voices for Innovation will keep our members informed about the progress of these proposals and highlight opportunities to engage.
In February 2022, Microsoft announced that it would voluntarily adhere to a set of Open App Store Principles, which closely parallel the rules proposed under the Open App Markets Act. The principles include 11 core commitments to foster competition while maintaining quality, safety, security, and privacy for developers and consumers.
Guide to Antitrust Laws – Federal Trade Commission
American Innovation and Choice Online Act (S.2992) – Congress.gov
Open App Markets Act (S.2710) – Congress.gov
Adapting Ahead of Regulation: A Principled Approach to App Stores – Brad Smith, Microsoft on the Issues
Two U.S. Big Tech Antitrust Bills Backed by Publisher Trade Group – Reuters
Senate Committee Votes to Advance Major Tech Antitrust Bill – CNBC
The Case Against Big Tech – Vox/Recode