Taxpayer Watchdog Slams Reintroduction of American Innovation and Choice Online Act

FOR IMMEDIATE RELEASE

Contact: Kara Zupkus (224) 456-0257

WASHINGTON, D.C. – Yesterday, Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) re-introduced the American Innovation and Choice Online Act. The bill proposes to impose staggering regulatory burdens that would fundamentally change the digital economy and bar large companies from engaging in routine pro-competitive and pro-consumer business practices.

In response to AICOA’s re-introduction, David B. McGarry, Research Director of the Taxpayers Protection Alliance, offered the following statement:

“AICOA’s deficiencies begin with its name: the bill would promote neither innovation nor consumer choice. Instead, it would render the everyday business practices of large platforms illegal. The practices targeted by this legislation are perfectly normal and unobjectionable. Indeed, businesses of all sizes, online and offline, engage in this conduct. The defining sin of the platforms to be regulated by AICOA is not anticompetitive conduct but sheer size. The bill rests implicitly on the assumption that big is bad—that big firms must by federal fiat be hamstrung in their operations. Firms that compete too effectively—that serve their customers too well—would be subjected to arbitrary regulatory strictures for the benefit of smaller, less competitive rivals.

“AICOA would not preserve fair competition any more than would a new rule in Major League Baseball dictating that all divisions’ leaders will begin games down five runs. America’s technology platforms—from such e-commerce sites as Amazon to such proprietors of operating systems and app stores as Apple—have gained their current place by innovating better than their competitors. This is healthy competition at work, ratified by the dollars and attention of consumers. The notion that large corporations’ market shares must artificially be shrunk or that of their competitors artificially inflated has less to do with American consumers’ preferences than the desire to re-shape the contours of markets to fit the sensibilities of a few lawmakers in Washington, D.C. A digital economy yoked by AICOA would yield less innovation.

“Consumers benefit from conduct AICOA would ban. Self-preferencing puts popular products and services at the top of search queues, saving consumers from lengthy searches. The restrictions some app stores impose on sideloading insulate consumers from malware and other cybersecurity risks. Centralized payment mechanisms preserve the privacy of financial information. The simple lesson: Most Americans do not want to traverse a digital Wild West. The safeguards and sorting mechanisms created by platforms are indispensable to an orderly, pro-consumer online experience.

“In previous Congresses, AICOA has never obtained the necessary support to become law. This Congress should proceed in similar fashion. The bill might please a few would-be central planners, but it stands in opposition to the interests of the American people. TPA looks forward to AICOA once again stalling and fading into obscurity, we hope for the last time.”

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The Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis, and dissemination of information on the government’s impact on the economy.