The Justice Department has approved antitrust laws that would prevent big tech giants like Google, Apple, Amazon and Facebook parent Meta from giving their own products preferential treatment.
The federal agency wrote a letter to bipartisan lawmakers expressing its support for America’s Innovation and Choice Online Act, which the Senate Judiciary Panel passed in January. An accompanying bill is currently awaiting approval from the entire House.
“We believe this law, if enacted, has the potential to positively impact the dynamics of digital markets going forward,” acting Assistant Attorney General Peter Hyun wrote in the letter, seen by the Wall Street Journal.
“Our future global competitiveness depends on innovators and entrepreneurs being able to access markets free of dominant incumbents that impede innovation, competition, resilience and widespread prosperity.”
The letter is the Biden administration’s most direct endorsement of the legislation, which analysts say indicates the Justice Department believes antitrust laws can be enforced and will help boost U.S. technology competition.
“The fact that the DOJ’s regulatory goals are aligned with Hill’s demonstrates the seriousness of the DOJ’s antitrust concerns in the technology sector,” Attorney Jeffrey Jacobovitz told Axios on Tuesday.
“We believe this legislation, if enacted, has the potential to positively impact the dynamics of digital markets in the future,” acting Deputy Attorney General Peter Hyun (pictured) wrote in the letter
Sent to senior members of the House and Senate Judiciary Committees and Antitrust Subcommittees, the letter alleges that the rise of dominant online platforms “poses a threat to open markets and competition, with risks to consumers, businesses, innovation, resilience and global competitiveness, and our democracy.”
The department also argued that the market dominance of large tech companies gives them uncontrolled power to influence the success of other companies.
“Discriminatory behavior by dominant platforms can erode the rewards of other innovators and entrepreneurs and reduce incentives for entrepreneurship and innovation,” Hyun wrote.
“More importantly, legislation can support the growth of new technology companies alongside the platforms, which may ultimately provide much-needed competitive controls for the covered platforms themselves.”
The bill would also supplement existing US antitrust laws by providing clarity on what types of conduct Congress considers anticompetitive and illegal, which, according to the letter, “would improve the DOJ’s capabilities and [the Federal Trade Commission] challenge that behavior.”
The Justice Department wrote a letter to bipartisan lawmakers expressing its support for the American Innovation and Choice Online Act
Relatively small tech companies, including Yelp, Sonos, and Basecamp, have supported the proposal, arguing that it serves to level the market.
However, major tech giants and other industry groups have campaigned heavily against the legislation, claiming it is discriminatory and compromises privacy and security.
They also claim that it is fair for e-marketplaces, search engines and app stores to capitalize on the popularity of their creations.
In addition, opponents argue that the bill could have the unintended consequence of taking services away from consumers.
“With the midterm elections approaching, we know voters don’t crave for Democrats to crack Amazon Prime or Google’s search results,” Adam Kovacevich, CEO of pro-tech group Chamber of Progress, told Axios.
Although it emerged from committees with bipartisan support, the fate of the antitrust law remains uncertain.
During the January vote in the Senate Judiciary Committee, lawmakers who voted to advance the bill expressed concerns about the bill. They want changes to be made before they support the proposal on the floor.
Sens. Amy Klobuchar (D., Minn.) and Chuck Grassley (R., Iowa) are reportedly working with their peers to create a version of the bill that will pass.
Daniel Francis, a former deputy director of the FTC’s competition office and an associate professor at Harvard Law School, argued Tuesday that the law may still not pass despite the Justice Department’s support.
“It’s always helpful to know where the DOJ stands on competition law, but it’s not obvious that this writing will change legislative dynamics in Congress surrounding the law,” he argued.