American Innovation and Choice Act is none of those things. But it is a window into economic ignorance
The Senate is holding hearings on a bill called the”American Innovation and Choice Act.” Sounds good, right? Who could be against choice and innovation?
Congress, of course. And as Wayne Brough writes, this bill would throttle choice and competition…while at the same time, giving government even more power:
At its core, S. 2992 is an attempt to prohibit or restrict the ability of large tech companies to compete online when they own the platform where sales take place. More specifically, the bill would make it hard for large tech companies to provide new benefits and products to consumers while forcing them to provide online rivals greater access to online platforms. Everything from offering private labels, such as Amazon Basics, to having Google Maps show up in Google searches to running an app store may be perceived as potentially unlawful conduct. While the Senate bill avoids the outright ban on self-preferencing in the House version, the practice is prohibited if it leads to “unfair competition,” the definition of which is left to the regulator’s imagination.
Yes, it’s an anti-tech fiesta of economic illiteracy combined with political preening (and not a little outright stupidity):
For example, self-preferencing is prohibited by the covered platforms. This includes activities such as a covered platform offering its own store-brand or “private label” products to compete with other brands sold on the platform. Under these rules, Amazon Basics would be potentially limited in its ability to compete with its rivals.
Yet, private labels exist throughout the world of retail and are not covered by this bill. Target, for example, has 48 private labels, and generates roughly a third of its income through the sale of its private label products. Walmart, Costco and all major grocery stores sell private labels that often provide the low-cost option for consumers. This head-to-head competition is a driving factor in keeping prices low and enhancing consumer welfare. The bill does not explain why “Kirkland” is acceptable, but “Amazon Basics” is not.
Prohibiting covered platforms from engaging in pro-consumer behavior may also yield surprising consequences for consumers. Free shipping with Amazon Prime, for example, may be viewed as an illegal discriminatory practice.
And it manages to get even worse:
[the bill] is problematic at an even more fundamental level. Namely, the legislation lacks a basic understanding of the market process. It ignores the tremendous rivalry that occurs in the marketplace, banning many practices that are inherently pro-consumer and hallmarks of competition at work. Limiting the ability of firms to improve their products or seek out information that allows them to more accurately meet consumer demand ignores the market process that spurs innovation, keeps prices low and provides the greatest consumer satisfaction.
Wait…members of Congress don’t know how markets work? I’m shocked, shocked! to discover that.
But that’s no excuse for their animus toward innovation, choice, and consumer welfare…things this very bad legislation has in spades.