Introduction

The American Innovation and Choice Online Act (AICOA) is a bill proposed in the United States Congress to promote competition in the digital marketplace by addressing antitrust concerns related to major technology companies. The bill aims to prevent monopolies and trusts by prohibiting dominant platforms from abusing their gatekeeping power, favoring their own products, and disadvantaging competitors. AICOA proposes that the Federal Trade Commission (FTC) and the Department of Justice (DOJ) enforce new antitrust and anticompetitive regulations. The regulations include:

• Prohibiting dominant platforms from preventing other businesses’ products or services from interoperating with the platform
• Prohibiting requiring a business to buy a dominant platform’s goods or services
• Prohibiting preferential gatekeeping placement on its platform
• Prohibiting misuse of a business’ data to compete 

Specific qualifications are required for application of the AICOA. The legislation only applies to the largest online platforms, which must be a “website, online or mobile application, operating system, digital assistant, or online service.” Qualifying platforms must: 

• Enable users to generate or interact with content, facilitate e-commerce, or enable user searches that display large volumes of information.
• Have at least 50 million U.S. monthly users or 100,000 U.S.-based monthly active businesses. 
• Have a market capitalization or a total U.S. net sales exceeding $550 billion, and serve as a “critical trading partner” for business users. The critical trading partner label signifies that the affected platforms can restrict or impede the ability of dependent companies to reach their customers.. 

Background

If enacted into law, the AICOA would affect most U.S. citizens. Companies such as Apple, Alphabet, Amazon, and Meta would be impacted. Almost half of Americans utilize an Apple iPhone, while almost 70% of adults use Meta (formerly known as Facebook). Further, almost half of the United States population uses Amazon Prime, and 70% of Americans, or 268 million individuals, shop online. The legislation aims to address issues raised in a 370-page report by the House Judiciary Committee in 2022 highlighting numerous anticompetitive practices in the digital marketplace. In 2022, the U.S. Chamber of Commerce released a national poll conducted by AXIS Research that indicated most Americans opposed the bill. The study reported that 79% of Republicans, 72% of Independents, and 59% of Democrats oppose or strongly oppose the AICOA.

Opposition to AICOA

Opponents of the bill state that it grants the FTC and DOJ too much regulatory power, and many free-market advocacy groups, such as Americans for Tax Reform and the Consumer Choice Center, publicly espoused this belief in a letter. They argue that the AICOA would enable the government to pick economic winners and losers. Neil Bradley, Executive Vice President of the U.S. Chamber of Commerce, echoed this stance and stated that the bill allows the FTC to decide what is lawful and to whom the law applies, and gives the ability to define what constitutes data, among many other powers. 

The proposed regulations, according to opponents, would harm consumers more than they would benefit. Joshua Wright, a Professor of Law at Antonin Scalia Law School, emphasizes the importance of competition and differentiation in the marketplace. He states that ranking functions are not only desirable but that they are necessary and beneficial to the consumers. Experts such as Geoffrey Manne, president and founder of the International Center for Law and Economics (ICLE), and Sam Bowman, Director of Competition Policy at the ICLE, seconded the previous statements. In an article, they labeled good digital platforms as “middlemen” that protect consumers by sorting through information to ensure that advertised products and businesses are not untrustworthy actors. Data corroborates these ideas, as users have been shown to prefer platforms that discriminate, like Amazon, over other, more chaotic platforms, such as eBay. 

Opponents also point out unintended consequences of the bill, including limitations for U.S. businesses to compete globally and concerns about data privacy. Sean Heather, Senior Vice President of International Regulatory Affairs & Antitrust U.S. Chamber of Commerce, argues that American companies would be limited from competing internationally under the new regulations. The disadvantage, he claims, stems from the fact that American-owned companies would be subject to regulations while foreign entities in a similar position would not. He states that the bill would impose economic damages for conduct that most would regard as healthy competition, limit covered platforms’ ability to innovate, and force platforms to share data with rivals. Gary Shapiro, President and CEO of the Consumer Technology Association, echoed this belief and claimed that the bill could “enable foreign rivals and cyber-criminals to access U.S. consumer data.” A provision in the AICOA makes it unlawful for covered platforms to impose limits on how other businesses access user data from consumers; however, these limits have been cited to help platforms protect consumers from fraud, abuse, and harassment. 

Support for AICOA

Proponents of the American Innovation and Choice Online Act argue that the strict language of the legislation will ensure that the government stays within its boundaries. Three digital policy scholars claim that any uncertainty in the language utilized in the bill, such as “materially harmed” and “competition,” will be resolved with the development of case law over time. They assert that the process for diminishing uncertainty with other laws is the same, so this bill will not grant any special powers. Further, the Congressional Research Service published a report that stated the “defenses appropriately place the burden to defend potentially anticompetitive conduct on platform operators, who have more information about their products than regulators.” Only State Attorneys General and federal agencies would have the power to file a suit, so they claim frivolous lawsuits would be avoided. 

The same scholars voice the opinion that current antitrust laws are weak. They argue that the competition enforcement against large online platforms does not promote competition currently and needs to be increased. Experts such as Columbia University law professor Tim Wu reiterate the need for competition, writing that limited competition deters innovation and new business. A report from the Center for American Progress (CAP) states that the proposed legislation will spark innovation and increase consumer choice by opening the market for new competitors to be seen by consumers. Partners at Winston and Strawn LLP concur, claiming that the AICOA will ensure that third-party sellers’ products will be seen. Organizations such as Small Business Rising, representing over 150,000 small businesses, agreed that the legislation was a “win for small businesses” that would ultimately promote innovation, new business, and third-party sellers. 

Supporters also argue that the legislation would enhance online consumer choice. Currently, “small and medium companies have no practical option but to go through these big tech companies to reach their consumers;” however, this bill would prohibit the anticompetitive practices that force consumers to pay more for fewer choices. More than 60 companies publicly embraced this belief in a letter, stating that the legislation would unleash the creative power of thousands of smaller companies that would have never seen the light of day.